PRIVATE BUSINESS

London Local Authorities Bill [Lords](By Order)

Order for Second Reading read.
	Read a Second time, and committed.

Oral Answers to Questions

ENVIRONMENT, FOOD AND RURAL AFFAIRS

The Secretary of State was asked—

Turkey Meat

Mark Todd: What steps she is taking to restrict turkey meat imports from Brazil which (a) are mis-described and (b) fail to comply with EU vaccine rules.

Elliot Morley: Imports are not allowed unless controls on vaccination against major poultry diseases are the same as those in the EU. With the assistance of Customs and Excise and the European Commission, we are looking at the levels of certain turkey products imported from outside the EU during the run-up to Christmas 2002, and whether they comply with EU rules.

Mark Todd: I welcome the brief answer that the Minister has given. My concern relates to the use of nitrofurans as antibiotics in turkey meat from Brazil, and the mis-description of imports into this country from Brazil, where products that appear to be marginally treated are dealt with in a different tariff fashion. This has had a major impact on Brandon's Poultry in Scropton, in my constituency. I hope that the Minister can take action to remove this unfair competition.

Elliot Morley: I know that my hon. Friend has been very active on behalf of his local company and his constituents in respect of this issue. I can reassure him that there are strict controls and regulations on imports from countries such as Brazil. They must come from a slaughterhouse that meets the EU standard, and they must go through border inspection posts, at which there is 100 per cent. inspection of documentation and 50 per cent. physical inspection of the product.
	I understand my hon. Friend's point about the use of illegal vaccinations. Tests are being carried out on poultry meat to ensure that such products are not receiving vaccinations that are banned in the EU. We are taking seriously the concerns that have been expressed, and we are currently carrying out a full investigation with the support of Customs and Excise.

Richard Bacon: I share the concern of the hon. Member for South Derbyshire (Mr. Todd) about nitrofurans in meat, and the Minister is aware of my concern about illegal meat imports generally, including turkey meat. What does he have to say in response to the comment made by the chief executive of the Food Standards Agency, Dr. Jon Bell, to the Public Accounts Committee yesterday? He said that a ministerial interdepartmental committee on illegal meat imports "is being set up". What does that say about the urgency with which the Government are addressing the question of illegal meat imports, despite all the pressure that we have put on the Minister in the past two years in the wake of foot and mouth and classical swine fever? Is this committee still going to be set up, and why has it not been set up already?

Elliot Morley: The House will know that a great deal of action has been taken in relation to illegal meat imports. On risk analysis, it is important to stress that there are a range of risks associated with importing disease and disease control, and we must address them all. Illegal imports is one of them and we take it seriously, which is why more finance has been provided, Customs and Excise has been given a stronger role, we have improved the range of publicity and information for people entering this country, and we have obtained agreement from the EU to end the derogations that allowed the importation of personal meat products.

Common Agricultural Policy

Anne McIntosh: If she will make a statement on the mid-term common agricultural policy review and its implications for British farmers.

Margaret Beckett: Although we would have preferred the Commission proposals to be more radical, they do represent a considerable improvement and we will be working hard to secure a positive outcome to the negotiations this summer. Our analysis of the proposals concludes that overall, they would have a positive impact on UK farmers and farm incomes.

Anne McIntosh: I am grateful to the right hon. Lady for that reply. Her Department is aware of the closure of Brandon's turkey factory in Dalton, near Thirsk, in the Vale of York, because of the impact of substandard imported turkeys from Brazil. Her Department is hiding behind the fact that currently, no EU action is being taken to prevent these sub-standard imports into this country. Can she give us an assurance today that in terms of sub-standard turkey imports and cheap sugar imports from Brazil, this House will be consulted before the final agreement is reached in the mid-term review, possibly before the end of June, in Greece?

Margaret Beckett: Well entirely, but apart from the issue of the mid-term review and the decisions being taken, it is currently against the law for people to import material from elsewhere that does not meet EU standards. So although I understand and recognise the hon. Lady's concern, the position that she describes needs to be addressed by means of enforcement of the current rules.

Mark Lazarowicz: I hope that my right hon. Friend will bear it in mind in the negotiations that many of us do not want the current system, through which farmers are subsidised for production, to be replaced by one which subsidises them simply because they own a piece of farmland or—even worse—because they once happened to be farmer. I know that she has been pushing hard for fundamental reform at European level, but I hope that she will bear in mind those concerns and press for as much funding as possible to be transferred to true rural development, rather than continuing with the current subsidy culture in another form.

Margaret Beckett: I understand that entirely, and well recall the Select Committee expressing anxiety that we would be in danger of simply transferring money from one area in which we subsidise to another. I share my hon. Friend's view that it is very important that we make the best possible use of public funds, and that the purpose is to provide public benefit. It is desirable to support the wider rural economy as well as agri-environment measures.

David Curry: Does the Secretary of State accept that there is an urgent need to establish what happens to the right of entitlement to the single farm payment in cases where the land has changed hands or tenancy during the reference period? If the decision is to devolve the matter to member states, will she ensure that the Government's intentions are clarified as soon as possible, and that a detailed consultation is held?

Margaret Beckett: I can certainly assure the right hon. Gentleman that the Government are very conscious of some of the serious and genuine practical problems that existing proposals raise. I cannot give the right hon. Gentleman the answer that he seeks at present, but we believe that the talks and negotiations remain on course for basic decisions by the end of June. Once we see the shape of those decisions, we will know what impact they will have. However, I assure the right hon. Gentleman that we have received many representations about the points that he makes, and that we take them very seriously.

Paddy Tipping: The mid-term review proposals to decouple payments do not sit easily with the Curry commission's recommendations on modulation—10 per cent., and then 20 per cent. Is my right hon. Friend confident that, in the light of that, the broad and shallow entry scheme can be funded?

Margaret Beckett: My hon. Friend is entirely right that the Curry commission proposals go further than the generality of the mid-term review reform proposals would suggest. That lends a particular importance and urgency to our efforts to have that position recognised and taken account of in the negotiations. I assure both my hon. Friend and the House that there is nothing that the Government want less than to abandon the steps that we have already taken or the plans that the Curry commission rightly put forward for further steps in the UK.

Andrew George: Although much of the language is impenetrable to members of the public, the Secretary of State is aware that momentous decisions need to be made very shortly. What will she do to secure a deal and face down the German and French pack to protect the viability of small family farms, ensure that the nation state is able to distribute the top-sliced modulated rural development funds and, above all, significantly reduce the overall common agricultural policy budget?

Margaret Beckett: I shall answer the hon. Gentleman's final point first. He will know that there is already broad agreement about the nature of the financial framework for the future use and structure of the CAP. I share his view entirely that much of the language is impenetrable, but the numbers at least are not. In addition, we have been, and will continue to be, engaged in extensive talks, bilaterally and in small groups, with other member states and the Commission. The course of action that the Commission is pursuing is that the proposals put into the public domain by Commissioner Fischler remain on the table. It is engaged in extensive dialogue with individual member states about the concerns raised by the proposals. We anticipate that there will be further extensive discussions at the next Agriculture Council, which I think is to be held next week. However, the proposals that remain on the table are the proposals with which the House and the farming community are familiar.

John Grogan: What estimates has my right hon. Friend made of the effect of CAP reform on the sectors that are currently unsupported, such as fruit and vegetables? Is there not a danger that some farmers will take single-farm payments, move into those sectors with a competitive advantage, and distort markets that are currently very finely balanced?

Margaret Beckett: My hon. Friend raises another serious and valid point, which has been raised with this Government, with the Governments of many other member states, and with the Commission. I can assure him that we are mindful of the danger. We do not believe that it is as serious as some of those engaged in the sector believe, but we accept that we have to examine the position and take it into account as the final proposals begin to emerge.

David Lidington: Does the right hon. Lady believe that a national scheme for modulation is necessary, in addition to the European modulation scheme proposed by the Commission?

Margaret Beckett: As the hon. Gentleman will know from what I said to my hon. Friend the Member for Sherwood (Paddy Tipping) a few moments ago, we are mindful indeed of the fact that our voluntary modulation—some other member states are also pursuing one—goes further than the Commission's initial proposals. We are discussing with the Commission how best to handle that in terms of the transitional scheme, which is particularly relevant to the United Kingdom.

David Lidington: But does the right hon. Lady not accept that the Commission's current proposals already discriminate harshly against British agriculture, which will be expected to shoulder a much greater share of the costs of common agricultural policy reform than would be borne by farmers in France or Italy, for example? Imposing a domestic scheme on top of a European scheme would weight the scales still further against the competitive interests of British farmers. What they want is a fair deal out of Europe. Can the right hon. Lady guarantee that she will be able to deliver that in June?

Margaret Beckett: I can certainly guarantee to fight tooth and nail to secure a fair deal for British farmers. We have no wish to see British farmers placed at a competitive disadvantage. However, the hon. Gentleman will have observed that even the Commission's current proposals on the criteria of modulation funding—we are pressing to remedy some of the unfairness that has been Britain's lot in some of the negotiations in the past—would benefit the UK by 9 to 10 per cent. That compares with 3.5 per cent. now, but I accept that aspects of the proposals are unfair and we are making that plain to the Commission.

National Air Quality Targets

John Robertson: What progress has been made on meeting the national air quality strategy targets.

Alun Michael: We have met, or are on course to meet, air quality objectives for five of the nine pollutants in England—namely benzene, 1,3-butadiene, carbon monoxide, lead and sulphur dioxide. Significant progress has been made towards meeting air quality objectives for nitrogen dioxide, particles, polycyclic aromatic hydrocarbons and ozone. That is a result of the measures that have been implemented to reduce emissions of these pollutants, and their precursors, particularly from road transport and industry.

John Robertson: I thank the Minister for his answer and I commend the Government for the work that they have done. However, conditions such as asthma are greatly exacerbated by pollution. Pollution may not cause it, but, as I know from my experience, it certainly makes it worse. The number of asthma sufferers now totals 5 million. Has the Minister examined the research on the effects of long-term air pollution carried out by the air pollution unit of the Department of Health? When will the measures that he has announced have a significant effect on air pollution, so that conditions such as asthma can be significantly ameliorated?

Alun Michael: My hon. Friend makes a good point. There is now greater sensitivity towards pollutants and a greater understanding of their impact. We do not believe that the battle is yet won: pointing to indicators of progress does not mean that we are satisfied with the position that we have reached. Although the emissions of most pollutants are falling, concentration levels of some are not falling as fast as we would like. I can reassure my hon. Friend that we shall remain focused on the targets and work with our colleagues in the Department of Health to remain fully sensitive to the points that he makes.

Norman Baker: Does the Minister accept that the good work done in tackling air pollution will be undermined if the airline industry is not brought under control? Is he aware that Heathrow, Gatwick and Stansted airports alone emit more than 2 million tonnes of carbon dioxide and 13,000 tonnes of nitrogen dioxide each year? The industry's CO2 emissions are set to double between 1990 and 2010. Will his Department support the imposition of a European Union aviation fuel tax, and also tell the Department for Transport that it must resist the discredited predict-and-provide policy for more runways in the south-east?

Alun Michael: The hon. Gentleman addresses transport policy and tax in his question, which confirms the important fact that many Departments make a contribution to these policy issues. We are conscious of the impact of air transport and the situation around airports, which is clear from our statement on the consultation documents on the future of air transport in the south-east.

David Drew: Does my right hon. Friend accept that air pollution is not simply an urban problem? It has a worrying effect in rural areas, especially given the amount of ozone from motorways. Is it right to put special effort into monitoring that, and does he agree that that should be part of a properly constituted overall policy, instead of one that just concentrates on urban areas?

Alun Michael: My hon. Friend makes a very good point. Ozone levels in rural areas are a problem, and we are not satisfied with the progress that has been made. It should be remembered that ozone is a highly trans-boundary pollutant and we are taking measures nationally to control ozone precursors, such as nitrogen dioxide and volatile organic compounds. Internationally agreed measures are the most effective ways to tackle that pollutant, as ground-level ozone concentrations in southern England are influenced largely by trans-boundary pollution. The UK will play a key role in seeking agreements on those issues, and my hon. Friend is right to highlight them as an area for concern.

Andrew Murrison: Surprisingly, many local air quality management areas exist in small market towns, and some of those are set to deteriorate further as a result of unsympathetic planning. What discussions has the Minister had with his local government colleagues to ensure that planning guidance is tightened up to prevent that from happening?

Alun Michael: The hon. Gentleman is right to suggest that air pollution problems arise in areas such as market towns, where one would not expect them, and he has raised the issue in the House in the past. I can assure him that air quality issues are considered across government by this Department and our colleagues in the Office of the Deputy Prime Minister and the Department for Transport.

Sustainable Development

Joan Ruddock: If she will make a statement on the outcomes of the 11th meeting of the UN Commission for Sustainable Development.

Margaret Beckett: The 11th session of the Commission concluded last week, having agreed a reform package and a new work programme that focuses on results and actions rather than textual negotiations. The outcome holds some promise that the CSD will be able to effectively fulfil its task of following up implementation of the Johannesburg world summit on sustainable development.

Joan Ruddock: Given the lack of binding targets on renewable energy set at Johannesburg and the fact that the follow-up on energy will not begin until 2006, what strategies are the Government developing on expanding the use of renewable energy globally, and will a British Minister attend the Bonn conference on that subject next month?

Margaret Beckett: We are mindful of the importance of the Bonn conference and we shall certainly be represented at a senior level. Unfortunately, we have not had much notice of those dates and Ministers' diaries are under considerable pressure. We are trying to find out who might be able to attend, but I cannot tell my hon. Friend at this point. I can tell her that we are involved in the renewable energy and energy efficiency partnership. We are taking that forward with great vigour and there is great interest in it from many companies and organisations across the world. We hope that it will be a fruitful vehicle. We are also working with other states that are pursuing similar partnerships internationally. I can assure my hon. Friend that the coalition of people who wish to pursue the advance of renewable energy is alive and well.

Michael Jack: On the issue of sustainable development and road fuels, the Secretary of State will be aware of the contribution that is being made by the development of biodiesel, especially from the use of oilseed rape as a feedstock. However, the 20p duty derogation is not considered sufficient to pump-prime the industry in the UK. What representations could her Department make, even at this late stage in the passage of the Finance Bill, to try to increase the derogation from 20p to 28p, thus triggering an important development in sustainability?

Margaret Beckett: We have had many discussions with our Treasury colleagues and I can, in all honesty, tell the right hon. Gentleman that there is no unwillingness in the Treasury team to look at those issues. There have already been, and there will continue to be, extensive discussions. The industry is very aware of the position: so far, it has not been able to make its case with sufficient force to convince the Treasury about the further steps that would make the dramatic difference that has been suggested. Treasury Ministers are open to those discussions—

Richard Bacon: Why not try it?

Margaret Beckett: We are talking about substantial sums of money. The Treasury has already made a substantial potential concession in revenue terms and is willing to consider discussions, but the case must be made.

David Kidney: My right hon. Friend will know that there is a growing network of eco-schools, where children of all ages learn about sustainable development in practical ways. That is a good way of embedding in future generations knowledge of, and responsibility for, sustainable development. Can my right hon. Friend tell us whether the Department already disseminates information on sustainable development to the network of eco-schools? If not, does she not think that it is a really good idea and is a way of improving people's understanding of sustainable development?

Margaret Beckett: I share my hon. Friend's view that it is a good way of improving the understanding of sustainable development. DEFRA and the Department for Education and Skills make substantial information available to schools. Offhand, I am not aware whether special information is devoted to the network of eco-schools, but I shall certainly draw my hon. Friend's remarks to the attention of the relevant staff.

Cormorants (Inland Fisheries)

Martin Salter: How much public money has been spent by her Department over the last seven years on research into predation of inland fisheries by cormorants; and what conclusions have been reached.

Elliot Morley: The Department has spent £1.4 million on research into predation of inland fisheries by piscivorous birds over the past eight years.The research programme significantly improved our understanding of the behaviour of fish-eating birds, their numbers and distribution and the extent of the problems they cause to fisheries, and helped towards the development of effective management strategies. The results of the early research have been published.

Martin Salter: Does the Minister agree that it will come as no surprise to either anglers or the taxpayers who funded the research to learn that cormorants eat fish? The point is what will the Minister do to make it easier for fishery owners and angling clubs to protect their stocks and their livelihoods, especially in the light of the news this week that at Walthamstow reservoir, fish stocks worth £50,000 were predated in a single year?

Elliot Morley: I know of my hon. Friend's interest in this matter. Indeed, he took me to Walthamstow reservoir to see the problem. Unfortunately, on that particular morning there was a thick fog so I can only say that I could see no problem. However, I know that there is a problem and that my hon. Friend is serious about it. As he knows, we have spent a great deal of money on looking into ways of dealing with the matter; for example, research is currently under way on fish refuges, which may be helpful in dealing with the problem. My hon. Friend will also know that in the worst-case scenario we can issue licences for control, but people have to demonstrate an economic loss and that other ways of deterring cormorants have been tried and have failed. We are willing to work with the angling world to find out how we can deter cormorants from eating its fish.

David Burnside: May I declare an interest? I have a pond on my farm in County Antrim—[Interruption.]—I will invite the Minister there.
	At this time of year, I go to Movanagher fish farm to buy brown trout to stock the pond. All year round, I never see a cormorant, but within 24 hours cormorants come in and eat every one of those trout—[Interruption.] This is a serious point. At Movanagher fish farm, at fish farms throughout the United Kingdom and in commercial and sporting fishing, it is a disaster. The only way to deal with the problem is not to waste money on civil servants but to designate a number of days when cormorant stocks throughout the UK can be culled.

Elliot Morley: I understand the hon. Gentleman's point. Of course there is an issue regarding still-water fisheries and the trend towards inland cormorant breeding, but his suggested solution may not work, and non-lethal deterrents may be equally effective. We do take the problem seriously; we must identify the most effective way of deterring such predation, and to do so we must examine the whole range of options.

Eric Martlew: We have been talking about fish-eating birds; may we discuss the situation with regard to a fish-eating animal—the otter? Only this week there has been a report that the otters are coming back in great numbers.

Mr. Speaker: Order. We shall have to leave the otters for another day.

Abattoirs

Nicholas Winterton: How many small to medium sized abattoirs there are in England.

Alun Michael: On 1 May, there were in England 116 licensed low throughput and 172 licensed full throughput red-meat abattoirs; and 43 licensed low throughput and 68 licensed full throughput white-meat abattoirs.

Nicholas Winterton: I am grateful to the right hon. Gentleman for that answer, which I think shows the dramatic reduction in the number of abattoirs in England and the United Kingdom as a whole. Will he share my concern that the last abattoir in my constituency, the family firm JJJ Heathcote & Son, which has been in operation for six generations, has closed because of the huge additional costs imposed upon abbatoirs by the animal by-products regulations—particularly those relating to biological testing and the disposal of blood, which will add costs to the company, which went out of active trading on 1 May, of £525 a week? The Minister can see that that is a huge additional sum. What is the Minister going to do to safeguard animal welfare and reduce the inconvenience and costs to farmers, by ensuring that in future small abattoirs remain in business?

Alun Michael: I understand the hon. Gentleman's concern because he referred to the closure of an abattoir in his constituency. I understand that the decision to close that abattoir was a commercial one, not attributable directly to the introduction of the animal by-products regulations, although they may be a factor.

Nicholas Winterton: indicated dissent.

Alun Michael: The hon. Gentleman shakes his head, but that is precisely what I understand, and I do not think that it helps to try to nail commercial decisions on to the introduction of regulations. It should be remembered that there is over-production in the abattoir industry in this country. To try to help, in view of the importance of the local and regional economy, we have refocused our policy on the abattoir sector, which means that abattoirs are eligible to apply for processing and marketing grants and to make use of rural enterprise schemes, in order to gain assistance from those elements in the England rural development programme.

David Taylor: Should not we be doing more not only to protect existing abattoirs but to encourage the re-establishment of local abattoirs? Will not that minimise stress to animals, reduce the risk and scale of any disease outbreaks and—as important as anything—encourage the availability of locally produced meat, which many consumers say that they are looking for and would support? Cannot we do much more than we are doing?

Alun Michael: My hon. Friend makes a good point about the need to ensure the availability of abattoir capacity in order to help local and regional products, and we are doing so in conjunction with the Government offices and the regional development agencies. However, one has to remember that we are talking about commercial activities, and the Meat and Livestock Commission has estimated that in 1999, comparing peak-week activity with average activity, the overcapacity amounted to 49 per cent. for cattle, 55 per cent. for sheep and 27 per cent. for pigs. I came across problems in the abattoir industry when I was first elected to a local authority in 1973, so many of these issues are not new. We should bear in mind, in trying to assist local and regional provision of facilities, that these are commercial activities and that there is still an element of over-provision.

Douglas Hogg: Would the right hon. Gentleman keep in mind the fact that the closure of abattoirs has very serious implications for animal welfare, as of course animals have to be transported very considerable distances if local abattoirs close?

Alun Michael: I entirely accept what the right hon. and learned Gentleman says, and I can assure him that we keep that in mind, and the fact that, in no small measure, the way we try to assist the regional and local economies is associated with that issue.

Colin Breed: I am sure that the Minister is well aware of the Countryside Agency report on local food, in which it says:
	"the erosion of the infrastructure that used to support local food markets was identified as a key barrier. In particular, the closure of local abattoirs, due to increasing legislation".
	Under the heading "Legislation", it says:
	"Regulations were felt to have a disproportionately high impact on businesses in the local food sector, which tend to be small/micro businesses. Much legislation is felt to be impractical, inappropriate, and unduly expensive to implement, particularly in the meat sector."
	What response has the Department made to that very important Countryside Agency report?

Alun Michael: Our response has to be proportionate because, on the one hand, yes, testing places burdens on industry, but many of those tests are either national or international requirements and, on the other, people want food safety to be enhanced, and they will find that encouraging. Wherever possible, we have to ensure that the burdens that we impose are proportionate and reasonable, that they are not excessive and that we do not go in for gold plating, but I am sure that the hon. Gentleman would accept that food safety is of great importance. The Countryside Agency focused on the economics of the local food industry, which of course is another important aspect and something that we are very keen to develop and promote.

James Gray: The Minister has tried to gloss over the very worrying closure of small abattoirs and, in some strange way, to attribute that to commercial reasons. Of course he is quite right: those commercial decisions are taken because of the huge increase in costs to small abattoirs and the huge increase in regulation. Those commercial decisions are directly attributable to the Government. Will he now tell the House how he perceives the additional costs that result from the animal by-products regulations, which are about to come into effect? How many small abattoirs need to have their incinerators upgraded? How much extra will that cost; and what approaches has he made to the European Commission about allowing small abattoirs grants for the capital costs that will be incurred because of the animal by-products regulations?

Alun Michael: The hon. Gentleman should be more reasonable in his approach. I have not tried to gloss over anything—I have made it very clear that very difficult issues face those in this industry—but it is equally unreasonable and unhelpful to try to suggest that closures are always associated with a particular set of regulations.

James Gray: Why else would abattoirs close?

Alun Michael: Because they are losing money in advance of the introduction of the regulations. That would be and is a reason in specific cases. I thought that the hon. Gentleman and his party were in favour of competition and believed in the effectiveness of the market. As for seeking to use grant schemes, I have already indicated that we have made available processing and marketing grants and rural enterprise scheme opportunities, as well as working with the regional development agencies and Government offices in the regions to consider the need for such provision in the regions. The regional and local provision of food and local sourcing are extremely important and something that we seek to support.

Food Exports

Tom Cox: What the value was of food exported from the UK to member states of the European Union in the last year for which figures are available.

Margaret Beckett: During 2002, the value of food, feed and drink exported from the UK to member states of the European Union was £5.6 billion.

Tom Cox: I note that reply and I thank my right hon. Friend for it very much. It indicates the enormous value to this country of our many excellent producers, who produce a wide range of food commodities that sell well in EU countries. As the EU will very shortly have 10 new member states, many of which produce food, many of us feel that we are under very unfair conditions. Can she assure the House that British producers, who have worked so hard to establish those markets in the EU, will not be squeezed out by unfair competition from new member states?

Margaret Beckett: I can certainly tell my hon. Friend that even at present the existing member states of the European Union export more to new members joining the European Union than vice versa. That is particularly the case with regard to high-value-added products and quality products. I certainly agree that this country has many excellent producers of food and drink of very high quality, which clearly gives us the market edge in the new member states. I anticipate that that will continue and I look forward to it doing so.

Roger Gale: What proportion does meat on the hoof rather than on the hook represent of the food exported from this country? Is the Secretary of State satisfied that when that product is branded and sold overseas it is sold as British products, and that British lamb, for example, is not sold in France as French lamb?

Margaret Beckett: I do not have with me figures for the proportion on the hoof rather than on the hook, although the hon. Gentleman will know that, in common with most Members, we would prefer all such exports to be on the hook. I am not aware of such exports being rebranded. If he has cause for concern in that respect, I would be grateful if he would let us know, as we will look into it.

Farm Regulation

Andrew Turner: What measures she will take to relieve regulatory burdens on farmers.

Margaret Beckett: My Department is firmly committed to ensuring that the regulatory burden on farmers is proportionate and that any regulation is applied in a way that causes as little inconvenience to farmers as possible. Our strategy for sustainable food and farming sets out proposals for a whole farm approach that will bring together regulatory requirements affecting farmers in a single coherent framework.

Andrew Turner: I am grateful for that answer. Does the Secretary of State agree that when there is a single regime, British farmers should have parity of treatment with others? If I may exemplify the point, my farmers are concerned that under the common agricultural policy review, agri-environment schemes may be enforced more rigidly in this country than in Europe. Secondly, my horticulturists are concerned that they must obtain licences for trickle irrigation while massive housing developments are allowed without regard to the need to extract more water to provide for those developments.

Margaret Beckett: I am not aware of any evidence to suggest that agri-environment schemes are enforced more rigidly here than elsewhere in the European Union. Certainly, however, we believe that there should be parity, and that there should be proper enforcement, with the relevant requisite disciplines, right across the EU. Indeed, that is part of having a common agricultural policy. Equally, I am not conscious of a particular problem with regard to water whereby horticulturists are treated differently and worse than others. I will certainly look into the point that the hon. Gentleman raises, however, as I assure him that it is no part of our approach to want to see UK producers disadvantaged.

Andy Reed: In discussion with farmers in my constituency last week, although they were not over-delighted by the number of regulations, they recognised that many of them are necessary. What they really felt needed to be addressed, however, was better co-ordination by the Department of the information provided, instead of having to fill in the same information on several different forms at a time. Will my right hon. Friend assure me that, while recognising that regulations are necessary, she will look at improving the technology to ensure that farmers do not have to do as much paperwork?

Margaret Beckett: I entirely share my hon. Friend's view that this is a matter of some considerable importance. Indeed, we are investigating now, in consultation with stakeholders, what kind of information would be most helpful to them and in what way we can best make it available. We would, of course, have to make the business case for the requisite systems to provide such information. I wholeheartedly assure him, however, that we are very mindful of how infuriating it is to be asked repeatedly by different groups of people for precisely the same information. That is exactly the kind of practice that we are trying to reduce.

James Paice: The Secretary of State will be aware that a regulation that is disadvantageous not only to British farmers but to European farmers is the temporary ban on the use of fish-meal in animal feed, which sets us against imports from outside the European Union. The reason for that ban was bovine spongiform encephalopathy and testing. Is she aware that there is now a proven test, using microscopic analysis, that has been submitted to the EU and which can distinguish between fish meal and mammalian protein, which means that the temporary ban should no longer exist? Will she make representations to the EU to get the ban lifted as soon as possible so that our producers may use that excellent protein?

Margaret Beckett: The hon. Gentleman will know, I am sure, that the Government share his concern to an extent, and we did indeed make representations on that issue. I also agree that it is important to press the Commission to examine that potential further step speedily. However, the first step is to ensure that the test is evaluated as quickly as possible. If it is successfully evaluated and it works in the way that is suggested, we can press for it to be taken into account, and I assure him that we shall do that.

David Lidington: On the animal by-products regulations, will the right hon. Lady confirm that we are now in the absurd situation in which the European ban on burying fallen stock came into force at the beginning at the month, but no implementing legislation has been introduced in the House to give effect to the ban or to provide for penalties for breaching it? Ministers are whispering behind their hands that everything will be enforced with a light touch for three months or so, but several local councils have already announced a strict enforcement policy. Farmers and councils alike deserve to know exactly where they stand, so surely the right policy would be for the right hon. Lady to announce a delay on enforcing the ban until the new national collection scheme is in place and operating.

Margaret Beckett: I think that there is a misunderstanding. The new national collection scheme is not a necessary prerequisite of the regulations' implementation. We urge farmers to sign up to the new national collection scheme because its purpose and effect is to lower the costs of implementation. We anticipate and hope—although we must always be cautious about making assumptions about how the House operates—that the regulations will be in place by the end of the month. Most farmers are clear about where they stand, although they may or may not like it.

Recycling

Jonathan Sayeed: If she will make a statement on her Department's strategy for promoting recycling.

Michael Meacher: The Government's "Waste Strategy 2000" set national targets for the recycling or composting of at least 25 per cent. of household waste by 2005 and 30 per cent. by 2010. To underpin these national targets we have set challenging statutory recycling and composting targets for all local authorities.

Jonathan Sayeed: I welcome the Minister's support for recycling but I would like to test what it actually means in practice. The Government attempted to remove all meaningful targets from the Home Energy Conservation Bill during its passage, although they were defeated in Committee by Conservative and Labour Members. They consequently destroyed the Bill on the Floor of the House. The current Municipal Waste Recycling Bill proposes recycling targets to be achieved by 2010 that would require, in the Minister's words,
	"an increase in the level of kerbside collection in the order of 45 to 50 per cent.".—[Official Report, Standing Committee B, 10 April 2003; c. 238.]
	Do the Government intend to support those targets or will there be yet another example of when new Labour talks dirty—[Laughter.] Sorry. Will there be yet another example of when new Labour talks green but acts dirty?

Michael Meacher: At least we do not act dirty, which the previous Government sometimes did.
	The hon. Gentleman misunderstands. I made it perfectly clear that the reason why we could not support the Home Energy Conservation Bill, although we certainly supported the overall targets, was that under the modernisation procedures through which we will finance the further burdens that we require of local authorities, which we have rightly instituted, the cost of the Bill would have been about £400 million. Following the spending review, such expenditure was not available. However, it is true that home energy conservation targets are increasing steadily and gradually.
	On the hon. Gentleman's second point about kerbside recycling, I remind him that the current level is about 51 per cent. according to the latest information available to me. We believe that if we get to a national recycling rate of 25 per cent. by 2005–06, and we have every intention of ensuring that that happens, the level of kerbside recycling will have to be increased substantially by local authorities. If we were to require them to do it, we would again have to pay substantial sums of money—perhaps as much as £200 million—which is simply not available in the spending review.

Anne Campbell: Will my right hon. Friend join me in congratulating the House authorities for doing their bit to promote recycling by providing Members with a separate bin for recycling waste paper? Does he agree that that promotion could be taken a step further, perhaps by having central collection points for used plastic bottles or tin cans? That might be a logical way forward.

Michael Meacher: I think that is a helpful suggestion. In terms of national targets and national performance, what happens in the House is infinitesimal by comparison, but it sends an important message. If we are asking other people in all households to increase recycling and recovery markedly—not just of paper, but also of plastics, aluminium steel cans, bottles and so on—it is important that we do it ourselves. I shall certainly take the matter up with the House authorities.

James Gray: The Minister is proud of his targets, but he must be aware that the Environmental Audit Committee described them as "depressingly unambitious". Does he agree with most hon. Members that bottle banks and the like will never achieve reasonable recycling targets? That can only be done by kerbside recycling, something that the Prime Minister acknowledged when he memorably said:
	"I want to see every local authority offering doorstep recycling".
	Does the Minister agree with his right hon. Friend? Does he, too, want to see every local authority offering kerbside recycling? If so, can he prove that by supporting the private Member's Bill promoted by the hon. Member for Lewisham, Deptford (Joan Ruddock), which will shortly be in Committee?

Michael Meacher: It is a bit of a cheek for the hon. Gentleman to make a case for recycling levels when we inherited a recycling level of 6 per cent. in 1997. That has been doubled to 13 per cent. and we intend to double it again to 25 per cent. within the next two years.
	It is also unfortunate that the hon. Gentleman prepared his supplementary question without realising that I had answered it in my full response to the question asked by the hon. Member for Mid-Bedfordshire (Mr. Sayeed), which he would have known had he been listening. Since he obviously did not catch it, I said that we are in favour of a big increase in kerbside recycling. It is already 51 per cent. We believe that achieving 25 per cent. overall national recycling by 2005 will increase that substantially. If we are to require local authorities to do that, however, we have to finance it from central sources, and we simply do not have the capacity in our budget to do that.

Sewerage Provision

Stephen Ladyman: What plans she has to change the law to make it easier for water companies to provide mains sewerage to rural villages.

Elliot Morley: While there are costs and technical issues, we consider water companies already have sufficient powers under section 94 of the Water Industry Act 1991 to provide, improve and extend the system of public sewers.

Stephen Ladyman: May I take issue with my hon. Friend, because they simply do not? The only way for water companies to provide mains sewerage to those rural villages in my constituency that need it is to use section 101A of 1991 Act, which requires them to prove the case on environmental grounds, not regeneration and economic grounds. The Water Bill is just up the Corridor at the moment and it amends section 101A. Will my hon. Friend please look at it and consider the minor amendments needed to make the changes so that we can give a real boost to those rural communities that need mains drainage?

Elliot Morley: I understand my hon. Friend's point. He has been active on the matter and recently wrote to us on a number of suggestions. However, if properly maintained, cesspits and cesspit tanks are perfectly environmentally acceptable. I appreciate that there is a cost attached to that and that there is also an issue of rural development. We are happy to explore ways of dealing with the issue if there is a case to do so on cost benefit grounds as well as environmental grounds. One way to do that might be to consider the facility in the English rural development programme in relation to support for rural communities and infrastructure. I shall write to my hon. Friend in more detail on that and am happy to explore the options. We accept that he raises important points.

Packaging Waste Regulation

Eric Illsley: If she will make a statement on the packaging waste regulation and wood products.

Michael Meacher: In view of allegations of inappropriate packaging waste recovery note issue by some reprocessors, I have asked my officials to conduct an investigation.

Eric Illsley: As my right hon. Friend knows, the price of packaging recovery notes for wood products slumped towards the end of last year and is quite low. There are another two issues facing wood recyclers: first, the subsidy offered by power generators for biofuels to use in power stations, where they can offer higher prices than board and wood products users. Secondly, there is the proposed removal of a packaging waste recovery target for wood products. We have heard today about the exploitation of forests in the far east. Is it not time that we did more to encourage wood products recycling, rather than allowing barriers to occur?

Michael Meacher: The latest figures show a very substantial increase in the recovery and recycling of wood packaging waste. It was reported at a rate of 57 per cent. in 2001. The latest figures for 2002 are 84 per cent. That shows a substantial uplift, so large that there have been suspicions of an inappropriate allocation and use of packaging waste recovery notes. That is what I have asked my Department to investigate. I accept my hon. Friend's point about the slump in PRN prices. I have told the industry that under the EU packaging waste regulations, there will be a considerable increase in those targets, probably of the order of 60 to 65 per cent. by 2006–08. In the light of that, further investment needs to be made now in readiness to meet those higher targets. On that basis, I hope that PRN prices will begin to recover.

Fisheries Council

Alistair Carmichael: If she will make a statement on the Government's aims at the next Fisheries Council meeting.

Elliot Morley: Agendas vary. Our aim at the May Council will be to support the development of effective measures for the future management of fishing effort in western waters.

Alistair Carmichael: With regard to the cod recovery programme, which I presume would be an essential part of that, does the Minister agree that it will be meaningless as long as we allow the industrial fishing fleet to remove an important part of the food chain? Will he use the next Fisheries Council to instil some urgency in the EU Commission with regard to the setting up of regional advisory councils?

Elliot Morley: As the hon. Gentleman knows, we are strong supporters of regional advisory councils. There is a great deal of activity going on in fishermen's organisations in relation to existing structures. We believe that for those councils to be effective, they should be driven from the bottom, rather than being imposed from the top. They must genuinely engage and involve the fishing industry. On industrial fishing, the hon. Gentleman knows my views. We are speaking to the Danes and to the Commission about the potential impact of industrial fishing. We have made £1 million available for scientific involvement with the English fishing industry. One of the topics that we are discussing with the industry is how we can use some of that money to fund proper examination of the by-catch and the ecological impact of industrial fishing, to strengthen the argument about its impact and to consider taking action on it.

Austin Mitchell: Accepting that my hon. Friend always puts up a good fight, and a very cunning fight, on behalf of the British fishing industry, and does his best to voice the demands of the industry in the Council, I hope that he will attempt at the next Council and succeeding Councils to put more muscle into the regional advisory councils. National management of the waters has been a longstanding demand of the industry, and the present framework is purely advisory and has no real influence and role. It needs to have a defined role in management of the waters that it covers, so that they can be removed from the general considerations of management from Brussels.

Elliot Morley: I understand my hon. Friend's point. He has been entirely consistent and made a powerful argument on these issues. We had to fight hard for the regional advisory councils to be part of the reformed common fisheries policy. There were people in this country who said that we would never succeed and never get that. We did get it, and as far as we concerned, we see it as a framework for development. It is inevitable that we will have to progress step by step in the beginning to build up confidence and establish the influence of the councils. In the UK, we want them to have real power and a proper decision-making process, and to give fishermen a voice and an involvement in the management of their own fisheries.

Business of the House

Eric Forth: Will the Leader of the House please give us the business for next week?

John Reid: The business for next week will be as follows:
	Monday 19 May—Progress on remaining stages of the Criminal Justice Bill (Day 2).
	Tuesday 20 May—Conclusion of remaining stages of the Criminal Justice Bill (Day 3).
	Wednesday 21 May—Second Reading of the European Union (Accessions) Bill.
	Thursday 22 May—Motion on General Synod Measure, followed by motion to approve a money resolution on the Municipal Waste Recycling Bill, followed by a motion on the Whitsun recess Adjournment.
	The provisional business for the week following the Whitsun recess will include:
	Monday 2 June—The House will not be sitting
	Tuesday 3 June—Consideration in Committee and remaining stages of the Fire Services Bill.

Eric Forth: I thank the Leader of the House for giving us the business.
	Yesterday in PMPs, the Prime Minister finally lost his marbles. My right hon. Friend the Leader of the Opposition said in column 305 of Hansard that
	"referendums on the European constitution are proposed in up to 10 European member states"
	and very reasonably asked the Prime Minister:
	"Why cannot the British people have one, too?"
	My right hon. Friend may have been inspired by the fact that a Minister of State in the Office of the Deputy Prime Minister, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), no less, had said a few minutes earlier in the slightly different context of regional assemblies:
	"It will . . . be for the people of each region to decide whether they want an elected regional assembly. That is democracy and choice, and we think that it is a good idea."
	So the Minister of State thinks that it is a good idea to consult the people and ask them what they think about regional assemblies, but the Prime Minister was, by this time, off on another flight of fancy. In column 305, he said:
	"the reason why the right hon. Gentleman"—
	the Leader of the Opposition—
	"wants a referendum is to vote no to enlargement".
	In column 306, he went on to say:
	"he wants people to say no to European enlargement"
	and
	"the Conservative party is . . . against the enlargement of the European Union".
	Finally, the Prime Minister said:
	"the European Convention . . . is necessary to make . . . accession work."—[Official Report, 14 May 2003; Vol. 405, c. 301–6.]
	Of course, Mr. Speaker, as you and the rest of the House know, there is absolutely no connection between the European Convention and constitution and enlargement of the European Union. Alarmingly, the Prime Minister of this country does not appear to understand the nature of this ghastly constitution that he now seems to want to inflict on the British people without even giving them a chance to say what they want.
	I remind you, Mr. Speaker, the House and the Leader of the House that on 17 October 2001 at column 1184 of Hansard, my right hon. Friend the shadow Foreign Secretary, no less, said of the Conservatives:
	"We are the long-standing and very committed supporters of enlargement. We were pursuing enlargement in 1990—11 years ago . . . we remain strong supporters of enlargement". —[Official Report, 17 October 2001; Vol. 372, c. 1184.]
	What I am therefore asking is: please can the Prime Minister come to the House, beg our forgiveness, apologise for not understanding what is going in his own Government and in the European Union and set the record straight? That is a very simple request and I hope that the Leader of the House will instruct the Prime Minister to sort himself out, get his act together and tell us what is really going on.
	On Monday this week, the Foreign Secretary and the right hon. Member for Birmingham, Ladywood (Clare Short) contradicted each other completely on the vital matter of the advice that the Attorney General had given the Government about the post-war Iraq settlement. What we really need to know—this is a very important constitutional matter, if nothing else—is which of them was right.
	The Foreign Secretary said:
	"I do not agree with my right hon. Friend's"—
	that is, the right hon. Member for Birmingham, Ladywood—
	"view about the position of the Government."
	He went on to say:
	"all the actions that we have taken have been taken strictly in accordance with legal advice."
	But a few minutes later the right hon. Lady said:
	"I believe that the UK could and should have respected the Attorney-General's advice".
	She went on to say that she was
	"ashamed that the UK Government have agreed the resolution that has been tabled in New York"
	and that it
	"undermines all the commitments I have made in the House and elsewhere."—[Official Report, 12 May 2003; Vol. 405, c. 26, 37.]
	This is a serious matter. A current member of the Cabinet and a former member of the Cabinet are saying completely contradictory things about exactly the same issue. Surely it is in everybody's interests that we get it straightened out. At the very least, the Foreign Secretary or the right hon. Lady should apologise to the House, but ideally the Attorney-General's advice should be published, because that would put the matter beyond doubt. Will the Leader of the House make arrangements for a member of the Government to come to the House as early as possible to tell us who was right—the Foreign Secretary or the right hon. Member for Birmingham, Ladywood?
	This morning on the radio we heard an announcement about the latest pensions cock-up. The Pensions issue is now spiralling downwards into complete disarray, yet we still have no Minister for Pensions in the Government. So who is going to tell us what is going on? Who is going to come to the House to explain this latest insult to pensioners? Who is going to tell us the reason for this ghastly error, which will cost nearly everybody in this country a lot of money? Why have the pensioners have been sidelined by the Government? Are they so careless and casual about pensioners that they cannot even get round to appointing a representative for them in the Government? Can the Leader of the House tell us when we will get a Minister for Pensions here in this House to deal with pensions issues and to explain the latest disgrace?
	A moment ago, I mentioned the right hon. Member for Birmingham, Ladywood. It is worth reflecting on what she said on 12 May when she made her personal statement to the House. She said, among other things, that we are now getting
	"diktats in favour of increasingly badly thought through policy initiatives that come from on high."
	She then said:
	"We do not need . . . endless new initiatives, layers of bureaucratic accountability and diktats from the centre."
	She rounded it all off by saying—this is an issue directly for the Leader of the House—that
	"increasingly poor policy initiatives"—
	are being—
	"rammed through Parliament". —[Official Report, 12 May 2003; Vol. 405, c. 38.]
	Will the right hon. Gentleman tell us what he proposes to do as Leader of the House—the representative of this House of Commons at the highest level of Government—to prevent that? We have seen all too much of it this week with the Finance Bill, the Northern Ireland Assembly (Elections and Periods of Suspension) Bill, and many other measures. Will the Leader of the House tell us in terms, and in detail, how he will prevent poor policy initiatives being rammed through Parliament and allow this House of Commons to do its proper job?

John Reid: I thank the hon. Gentleman for his normal stentorian contribution, to which I look forward every Thursday, and for his request that I instruct the Prime Minister to come to this House to beg forgiveness. He is that type of guy, is he not? I will consider that request, but I will particularly consider whether I can find anything for which he should seek forgiveness. Given the number of occasions on which the Prime Minister has come to this House to make statements and to answer questions—far more, incidentally, than has any other Prime Minister—it is not obvious to me what we should ask him to beg forgiveness for.
	The hon. Gentleman—

John Bercow: The right hon. Gentleman.

John Reid: I beg pardon. The right hon. Gentleman asked about the Convention. First, there is a difference between a referendum on a national issue and on the sort of issues that he and his colleagues mentioned in the past week. They range from Iraq, which does not have the sort of established parliamentary democracy that we have, to the elections in Hartlepool, which may be interesting but are not comparable with the powers of Parliament. I am surprised because the right hon. Gentleman is normally the arch defender of the rights of Parliament rather than the arch exponent of passing major decisions out of Parliament.
	Secondly, in Britain, Parliament ratifies treaties. We do not hold referendums on them, although that happens in Ireland and several other countries. [Interruption.] Well, the Tories did not hold a referendum on the Maastricht treaty or the single European issues that came before the House when they were in government.
	Thirdly, the new constitutional treaty will not fundamentally alter the position of the member states of the European Union. Powers are given by member states to the Union to achieve goals that they could not attain alone. The fundamental building blocks of the European Union will remain the individual states. The right hon. Gentleman's normal position of defending Parliament's rights has been undermined by the expediency and opportunism that Conservative Members apply to everything that appears to relate to Europe, which, individually and collectively, they hate more by the day. It is another element of their extreme position.
	The right hon. Gentleman does not need to take my word about the Attorney-General, who made it clear before we went into action in Iraq and subsequently that the Government have acted in accordance with international law. Any suggestion to the contrary is wrong; that should be good enough. There will be a dozen different opinions internationally on any legal issue. That is the nature of domestic and international legal debate. Again, I hope that the Conservatives would tend to accept the opinion of this country's chief legal adviser rather than that of some critics abroad who take a different position.
	The right hon. Gentleman raised the important issue of pensions. This morning's report was not entirely accurate. No computer breakdown has occurred. The annual notification service to people who have gaps in their contribution records was suspended in 1998 because priority was given to processing current benefit and pension claims. That was the right thing to do because it meant that those who had immediate needs were dealt with first.
	As with any Government position, Ministers will be replaced in due course. Any insinuation that we have not given due attention to pensioners is wrong: the Government introduced the minimum guaranteed pension, the winter fuel allowance, the pension credit, free television licences for those over 70 and the extra £100 for those over 80. Any suggestion from Conservative Members that the Government have not paid sufficient attention to pensioners stretches the imagination.
	The right hon. Gentleman asked about the scrutiny of debates in the House. Programming has brought many benefits as part of a wider package, although I accept that it is appropriate to review its workings to ascertain whether they can be improved. In the past few days, I have been discussing the matter in the Modernisation Committee and we will consider a review of programming.
	It is not justifiable to judge programming on this week's experience of Northern Ireland, which tends to produce the unique need for rapid legislation under all Governments. I accept that there were problems, not least because a personal statement and a statement by my right hon. Friend the Foreign Secretary further reduced the limited time available to hon. Members, especially those from Northern Ireland. I am not for a minute disregarding that fact, but Northern Ireland tends to be a unique case. Nevertheless, a review of the workings of programming is something that we ought to, and indeed will, look at.

Paul Tyler: Does the Leader of the House recall that, this time last week, we were congratulating him on his birthday? He is therefore now one year nearer to his retirement and his pension. Surely he must take more seriously the incredible cock-up at the Inland Revenue, as well as the cover-up—because that is what it is. There was no announcement about it on the radio, as the right hon. Member for Bromley and Chislehurst (Mr. Forth) suggested. It was only the sharp eyes of a representative of The Daily Telegraph and my hon. Friend the Member for Northavon (Mr. Webb) that discovered the fact that the Inland Revenue had failed in this respect. Is it not extraordinary that, for five years, there was no announcement, no admission and no apology about this extraordinary change of attitude? Is it not also extraordinary that 10 million people have been badly let down? Now, of course, the Inland Revenue is admitting the mistake by trying to put something in place to mitigate its failure. Surely, given the well-known humility of the Chancellor, we should have a statement from the head of the Department responsible about what has gone wrong and what is now going to be done to put it right.
	I hope that the Leader of the House has had the opportunity this week to read "Parliament's Last Chance", produced by the Parliament First group, whose authors include some very distinguished members of his own party as well as of all the other parties. I am modest enough to admit to having made a small contribution to it. I hope that the Leader of the House will accept that that report reflects the all-party concern about the way in which the House holds the Government to account. To cite a particular example to which reference has been made this afternoon, the Treasury is responsible for the Inland Revenue, and the Inland Revenue has clearly made a huge mistake, which it is now admitting. That matter should come to the Floor of the House and we should be given an explanation.
	Finally, I believe that, on the "Today" programme this morning, the Leader of the House referred to Mr. Ronnie Biggs as a bank robber. Should we assume that the right hon. Gentleman's other answers this morning were equally inaccurate?

John Reid: I do apologise if I said "bank robber" rather than "train robber". That no doubt means that Ronnie Biggs is utterly innocent and should never have been pursued in the first place. I think that we should deal with the substance of that issue, which was that the original charges, or action taken on the basis of a decision made on evidence, should not necessarily fall merely because we do not find all the evidence after the event. A decision in the case of Ronnie Biggs, or any other matter decided in the courts, is not contingent on full discovery later.
	I have already referred to pensions. When the right hon. Member for Bromley and Chislehurst referred to pensions and the radio programme this morning, I thought that he was referring to the point that the hon. Member for North Cornwall (Mr. Tyler) has just raised. I have pointed out that there has not been a computer breakdown, as was apparently alleged. The annual notification service to people with gaps in their contribution records was suspended in 1998 because priority was being given to processing current benefit and pensions claims. That was the right thing to do because it meant that people with immediate needs were being dealt with first. The Inland Revenue will start writing to people later this year to let them know of any gaps in their records since the last time the notices were issued. People will not have to respond immediately; indeed, they will have until April 2008 to make payments if they wish to do so.
	The hon. Member for North Cornwall mentioned Parliament First. I welcome any contribution to the debate on the modernisation of the House of Commons, but I hope that hon. Members will recognise that we have just completed a series of fairly substantial and extensive changes. I would like some time—and I think the House would be wise to take some time—to reflect on the many proposals that have already been put in place and to see how they are working. One that was introduced some time ago was programming, to which the right hon. Member for Bromley and Chislehurst referred. I think that, in principle, that will no doubt remain, but we will want to look at the workings of the provision.
	Both the right hon. Member for Bromley and Chislehurst and the hon. Gentleman mentioned general scrutiny of the House. We have tried to ensure that that takes place wherever possible. During the war with Iraq we arranged debates in the House in an unprecedented fashion. An unprecedented number of statements have been made to the House by Ministers, including the Prime Minister. Today we have announced an extensive period of consultation and discussion between Cabinet members on the euro, culminating in the announcement of a decision to the House on 9 June. We will ensure that there is adequate parliamentary scrutiny of that important issue, along with many others.

David Chaytor: May I return to my right hon. Friend's point about Ronnie Biggs, and about not discovering all the evidence after the event? Does he agree that there is continuing public concern about weapons of mass destruction in Iraq? Is it not the case that just a few weeks ago the UN weapons inspectors were working with some success there, but we were then told that there must be a war because they could not find the weapons, and were subsequently told that only American inspectors could find the weapons because they were concealed so well—and then learnt that the American inspectors were being withdrawn? This week we have been told that the weapons are so small and so well concealed that we may never find them anyway. Do we not need a full parliamentary debate, so that we can consider all the evidence?

John Reid: Actually, the evidence is starting to emerge. Coalition forces have discovered two vehicles which appear to be mobile biological weapons facilities. Testing and analysis of the vehicles is continuing. I have no doubt that if they prove to be what they appear to be, someone will say "But there are no bacterial media in them at present".
	For seven years the inspectors were finding thousands of litres and tonnes of evidence, but the fact that we have not found further evidence does not mean that the intervention to reduce the threat from Saddam Hussein was either illegal or improper. That is why I drew a comparison with a bank robber whose stolen money has not been found. As I have said, I am convinced, as I was when we went into Iraq, that there was a threat from weapons of mass destruction—

Paul Flynn: Rubbish!

John Reid: That is not a very constructive contribution. Moreover, it represents my hon. Friend's view against that of the united world community. The entire United Nations accepted that there was a threat from weapons of mass destruction. The only argument was about how we should deal with the threat; it was not about whether a threat existed. That is as true today as it was six months ago, and 12 years ago.

Patrick McLoughlin: Will the Leader of the House find time for a debate on local government which the Prime Minister might be able to attend? On two occasions I have raised the issue of local government funding and Derbyshire Dales. Yesterday I asked
	"Can the Prime Minister explain why the average increase for Derbyshire districts this year was some £570,000, yet for Conservative-controlled Dales district council it was an increase of £33,000?"
	The Prime Minister replied that there had been
	"a substantial increase in the investment going into education."
	He went on
	"That is true. We are working on school funding problems in the way that we have explained."—[Official Report, 14 May 2003; Vol. 405, c. 308.]
	The fact is that district councils have no responsibility whatever for education. Should the Prime Minister not understand the functions of local government before giving us answers? That answer was inaccurate.

John Reid: Let us discuss the financing rather than the function of local government. Let me put two simple facts to the hon. Gentleman. I am afraid I do not know the details relating to the council that he mentioned, but I do know two things. First, since this Government came to power there has been a 7 per cent. real-terms increase in local authority funding, whereas there was a 25 per cent. cut during the final four years of the last Government. Secondly, for the first time in the country's history, every council in England has received an increase above the rate of inflation.

Anne Picking: Is my right hon. Friend aware of the restrictions placed on postal services in the House recently? Some of us who work late into the night would like to have that service. Could my right hon. Friend use his good offices to improve matters?

John Reid: Members on both sides of the House have mentioned the revised collection times. Having discussed the matter with Royal Mail and Postcomm, I can confirm that there has been a positive response, at least initially. Royal Mail will now discuss future arrangements for later collections with the authorities, and I will ensure that all Members are informed of the outcome. I cannot promise a substantial change, but I can prove that we are on track to secure some form of change, which I know will benefit everyone.

Andrew MacKay: It was unfortunate in the extreme that during last week's business questions the Leader of the House failed to respond to my request for a statement from the Secretary of State for Northern Ireland about the arrest of Liam Clarke, the Sunday Times journalist, by a large number of armed policemen in the middle of the night. The matter is not sub judice, and it does not involve the wider issues that the Leader of the House was trying to avoid.
	This will not go away. This is not Iraq under Saddam Hussein; it is a civilised democracy, and we want a proper answer.

John Reid: I will not respond to the last comment. I am sure that the right hon. Gentleman was not drawing any comparison between the way in which we conduct business and the way in which Saddam Hussein conducted business. [Interruption.] I think that the currency of debate is slightly demeaned if we draw such comparisons.
	The right hon. Gentleman says that the case is not sub judice, but it does impinge on intelligence matters. I know that this will be disappointing and frustrating for the right hon. Gentleman, but I must repeat what I said last week: a comment has been made by the Prime Minister, and I do not want to add to it.

Ann Cryer: Does my right hon. Friend agree that the problems involving reminders to people to top up their national insurance contributions began before this Government were elected? I seem to remember that I received reminders in 1995 and 1996, but not in 1997. We were not elected until the summer of 1997, and I think that some of the responsibility for the choice and installation of computers must lie with the Conservative party.

John Reid: I am not going to question my hon. Friend's memory. If it is accurate, I am sure that, as on all these occasions, the Conservative party will be only too willing to bear its share of the responsibility.

Pete Wishart: What will the right hon. Gentleman do to ensure that there is no repeat of the nonsense that occurred throughout the Committee stage of the Finance Bill? Owing to what appeared to be an extremely unseemly and childish squabble between the two Front Benches, we found ourselves discussing inconsequential clauses and amendments, and we did not reach the Scottish National party's reasoned and considered amendment on the oil industry. Does the right hon. Gentleman not believe that when the public see the House indulging in such behaviour they rightly hold it in contempt?

John Reid: I think that many important issues were discussed during the Finance Bill debates, as they always are. I think that people in Scotland and throughout the United Kingdom want the Finance Bill, which affects their incomes, their outgoings and their quality of life, to be discussed as fully as possible. I very much regret that we did not manage to reach an amendment that was of particular interest to the SNP, but I do not think it right to diminish everything else that was discussed because of that.

Colin Challen: In the light of this week's decision by the European Court of Justice to effectively strike down this Parliament's right to decide whether the Government should have golden shares in publicly owned companies such as Royal Mail, may we have an urgent statement from the Secretary of State for Trade and Industry? Many people will fear that the new forms of public ownership created by the Government may suffer the same fate.

John Reid: I will draw that matter to the attention of the Secretary of State for Trade and Industry—I assume that she is the appropriate Secretary of State—not least because I am not entirely au fait with all the facts of the subject that my hon. Friend raises.

Richard Bacon: Does the Leader of the House accept that simply because there is not yet any clear and irrefutable evidence that the Prime Minister, the Chancellor of the Exchequer and other Ministers are squabbling like ferrets in a sack about the single European currency, that does not mean that it is not happening? Does he therefore accept that it is time for the House of Commons to have a full debate on this issue, so that we can find out the truth?

John Reid: That is very topical, if I might say so. We have stated publicly all along the criteria on which such judgments will be made, and that the decision will be a collective one. This weekend, 18 technical documents on the Treasury's assessment will be sent to every Cabinet Minister. The Prime Minister and the Chancellor will have bilateral meetings with Cabinet members next week to discuss those documents, and an initial discussion will take place at next week's Cabinet. We will of course continue to discuss them profoundly, and on 26 May we will circulate the assessment arising from the initial documents, which will be read by every member of the Cabinet during the Whitsun break. There will be further bilateral meetings between Cabinet members and the Prime Minister and the Chancellor to look at the assessment, and there will be a special Cabinet on 5 or 6 June for a final discussion. An announcement will be made on 9 June, and I can confirm that a statement will be made in this House on that day. That is a fairly full, profound and collective approach to these matters.

Tony McWalter: On local government settlements, does my right hon. Friend accept that this year's local government debate was severely truncated, and that as a result many of us who wanted to make representations were unable to do so? I accept his earlier comment that the level of settlement was above the rate of inflation—at the time the rate was 2 per cent., yet Hertfordshire got 3.6 per cent.—but the reality is that inflation in the education sector is acknowledged to have been running at 10.6 per cent. As a result, the further education college in my local area, which depends for funding on the Learning and Skills Council, has not implemented any increase in lecturers' wages since 2002, is making 10 per cent. of its staff redundant and is axing many of its courses. Does my right hon. Friend accept that, overall, the local government settlement and miscalculations have in some ways done a great deal to diminish the quality of life, compared with the wonderful things that the Government have done in many other areas?

John Reid: It is correct that in contrast with the overall settlement—my hon. Friend mentioned a figure of some 3.7 per cent. for his area—the rate of inflation in education was higher, but it is also true that within the overall settlement there was a higher percentage increase for education than for other areas. The burdens that were put on education through increased pensions, and so on, amounted to some 11.5 per cent., but the average increase in education provision totalled some 12.5 per cent. In all, some £2.7 billion was put into education, while the inflation constraints that he mentions constituted about £2.45 billion. So the Government made adequate provision for the pressures that he describes.
	I should like to take this opportunity to correct some figures that I mixed up earlier. In fact, in terms of local authority expenditure this Government have provided a 25 per cent. increase over the past few years, while during the last few years of the previous Conservative Government there was a 6 per cent. cut.

John Barrett: Now that the Leader of the House's constituents are set to benefit from free eye tests and dental checks, will he find time to debate extending these provisions to the rest of the country?

John Reid: In terms of general expenditure on the national health service and medical provision, there is no doubt that the entire country has benefited enormously from this Government. How that money is applied in any given part of the country will, through devolution, be tailored to the demands in a particular part. However, it is a question of swings and roundabouts: if money is spent one aspect of medical provision, it cannot be spent on another. The point of devolution is that such suggestions can be made in each area, and we can tailor provision in each to the particular demands.

Tom Watson: Will my right hon. Friend consider having a debate on the professional duty of journalists to protect their sources? In an alarming number of cases, the courts are ordering journalists to betray confidential information given to them in the public interest. They include the case of Mr. Robin Ackroyd, on whom judgement will be made in the Court of Appeal tomorrow.

John Reid: I obviously cannot comment on a specific case. A difficult balance is involved, and I am sure that my right hon. Friend the Secretary of State for Culture, Media and Sport will have heard what my hon. Friend said.

Gillian Shephard: The Leader of the House will be aware that the Government's response to the Victoria Climbié inquiry, in the form of a Green Paper, is eagerly awaited. It was originally suggested that we might expect that response before the end of this month, but that now seems unlikely, given the right hon. Gentleman's exposition of business. Can he give us any idea of when we might expect the Green Paper?

John Reid: I am afraid that I cannot do so from the Dispatch Box today, but I undertake to write to the right hon. Lady as expeditiously as I can with whatever details we can find out.

David Wright: Has my right hon. Friend had a chance to look at the recent Commission for Health Improvement report, "Getting Better", which discusses how increased investment in health in the UK and better national standards are leading to significant improvements? May we have a debate in the House on that matter?

John Reid: I am eager that this report be debated in every conceivable forum because, as my hon. Friend says, it is the clearly stated conclusion of this independent inspection body that the national health service as a whole is getting better. There are of course areas that we want to improve, but I note that the chairman, Dame Deirdre Hine, has said:
	"The bottom line is that the NHS as a whole is getting better."
	The report concludes that waiting times are falling, that the NHS has made significant progress in respecting a person's right to be fully involved in decisions in the health service—that is very important—and that the service people receive from the NHS is different, and better, today than the service they would have received even a few years ago. I hope that we can deliberate on some of those findings at every conceivable opportunity.

John Taylor: May we have a ministerial statement and a debate on the seemingly becalmed regional airport consultation, given the recent BAA proposals and, more importantly, that some of my constituents are having difficulty in obtaining copies of the questionnaire from the advertised distribution centre? Perhaps the right hon. Gentleman could get me a thousand copies or so, and I will distribute them myself.

John Reid: The consultation is ongoing, but I will do what I can to look into the specific problem that the hon. Gentleman mentions if it is inconveniencing or in any way prohibiting his constituents from participating fully in any consultation.

Mark Fisher: Will the Leader of the House reconsider that part of his answer to the Liberal Democrat spokesman, the hon. Member for North Cornwall (Mr. Tyler), that related to the Parliament First document, "Parliament's Last Chance"? In particular, will he recognise that there is an important distinction between modernising the procedures of this House and reforming its politics? Will he also give consideration to the several recommendations in that pamphlet about strengthening the role of Parliament in scrutinising and monitoring the Executive? They are very much in line with the Liaison Committee's report of a couple of years ago, entitled "Shifting the Balance". If put into practice, they would greatly strengthen the role of this House in relation to government—to the benefit both of government and of Parliament as a whole.

John Reid: As I said, I welcome any contribution to this debate; we want a lively democracy and a lively debate about the means of it. I cannot say that I welcome a particular aspect, because I have not read the pamphlet. Obviously, scrutinising the Executive is a very important role for the legislature in this country, but we are all aware that arrangements here are not like those in the US. It is not as simple as having a legislature and an Executive: we have an Executive who are embodied in the legislature, and it is the Executive by virtue of the fact that it is part of the legislature. The relationship between Parliament and Government is very important, and I welcome all contributions as to how the relationship can be conducted to the benefit of our democracy and of the people of this country in the future.

Roy Beggs: We anticipate that announcements will be made later today that billions of pounds are to be invested so that the Olympic games can be held in the UK in the near future, yet we in Northern Ireland do not even have a national stadium. When planning our business, will the Leader of the House try to arrange for a debate on the matter? It could be held in the Northern Ireland Grand Committee, which is still to meet in Northern Ireland. Will he undertake to consider the matter and, I hope, arrange such a debate before too long?

John Reid: I would not wish to pre-empt anything that my right hon. Friend the Secretary of State for Culture, Media and Sport, who has just taken her place on the Front Bench, is due to say. However, during my period as Secretary of State for Northern Ireland, I gained some understanding of and sympathy with the point of view expressed by the hon. Gentleman. Anything that brings people in Northern Ireland together in recognition of what they have in common is to be supported and encouraged. Although I think that it is for my right hon. Friend the Secretary of State for Northern Ireland to decide when and if such a debate should take place, I shall, of course, draw the hon. Gentleman's remarks to his attention.

Jon Trickett: On the European Convention, my right hon. Friend is right to remind the House that the country is governed by Parliament and not by plebiscite, and that the right place for such debates is this House. However, does he share my concern that there is a widening gulf between the people and the political elites—the ones who make the decisions—about the future of Europe? If he does share my view, will he ensure that adequate time is found for discussion on the Floor of the House of any constitutional implications of the European Convention? That would also allow Labour Members to have the pleasure of seeing the continuing civil war among Opposition Members.

John Reid: Yes, any time spent with the dual objective and purpose of clarifying the Government's position on the matter, and of magnifying the deep divisions among Opposition Members, is time very well spent.

George Young: Further to the reply that the Leader of the House has just given, will he now answer the question posed by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the Prime Minister? Yesterday, the Prime Minister said in terms that, if there were to be a referendum on the new European constitution and the country were to vote no, that would block enlargement. Was the Prime Minister right, or wrong?

John Reid: I am not sure that the Prime Minister—[Interruption.] I am trying to reflect on the words used by the right hon. Member for North-West Hampshire (Sir George Young). I am not sure that my right hon. Friend the Prime Minister used the words attributed to him. The case that I set out earlier was quite simple—that, in this country, Parliament ratifies treaties. That is what happened with the Maastricht treaty, when the right hon. Gentleman was a member of the Cabinet that supported the decision that Parliament should determine whether that treaty should be ratified. Moreover, as I pointed out, the basis for the Convention and constitutional changes is mainly consolidation, and not the introduction of new elements.

Richard Burden: Will my right hon. Friend the Leader of the House ask my right hon. Friend the Foreign Secretary to make a statement next week on the discussions that he is having with the Israeli Foreign Minister today? Such a statement should cover the position of foreign nationals working for aid agencies in the Gaza strip and other occupied territories. My right hon. Friend will know that it was reported last week that foreign nationals were being asked to sign a waiver authorising the Israeli military to shoot them. He will be aware also that many Governments, including our own, have received a letter this week from the aid agencies, which states that visa restrictions and other restrictions make it almost impossible for them to enter the Gaza strip, or continue their vital aid work there. Does he agree that that is against the spirit of the road map? Given that levels of poverty in the area are equivalent to those in sub-Saharan Africa, is not it time for the international community to act?

John Reid: I am sure that my right hon. Friend the Foreign Secretary will have heard the specific comments that my hon. Friend makes. With regard to the general issue of the middle east peace process, I hope that my hon. Friend accepts that the House has spent some time discussing the matter, despite considerable time pressures, and that the Government, from the Prime Minister down, have done all that they can to bring the parties involved together, and to ensure publication of the road map so that there can be a viable state for the Palestinian people and a secure future for the state of Israel. Eventually, both sides will need to talk, and to reduce the tension in the area. Presumably, that means that they will have to deal with some of the matters raised by my hon. Friend.

Point of Order

David Maclean: On a point of order, Mr. Speaker. I rise to ask what you can do to force Government Departments to follow the normal convention in the House that statements are given to Opposition spokesmen a reasonable time before they are made by a Secretary of State in this House. The statement that is about to be made was faxed through a mere 15 minutes ago. That is not the fault of the usual channels or of the Leader of the House's office. I believe that staff there were in despair that another Government Department had not given reasonable notice to the House authorities that an important statement was coming.
	The statement has been in the pipeline since January. We all saw on the news last night that a huge press conference was planned for today; journalists are en route there at this moment. We were told that this statement was going to be made, and in those circumstances there is no justification for giving the text to Opposition Front-Bench spokesmen a mere 15 minutes beforehand.
	Finally, Sir, I must warn the Government that if they persist with this behaviour, as Opposition Chief Whip I will have no option but to find what measures Standing Orders allow me to take to buy some time for Opposition spokesmen to read a statement. I may have to disrupt procedures accordingly.

Mr. Speaker: I would not want the right hon. Gentleman to disrupt procedures but, if what he says is true, I am very disappointed indeed. I was informed that a statement would be made this morning before my conference at 10.30 am. Therefore, I would have expected Opposition parties to be given at least an hour to examine the statement, so that they are able to put a decent case from the Dispatch Box. I shall have to investigate the matter but, if the circumstances are as described, I hope that it does not happen again.

John Reid: Further to that point of order, Mr. Speaker. Of course we will take your strictures to heart on this matter. However, I hope that you will understand that it is possible to give notice of a statement days or months in advance, but not to decide its exact terms until the Cabinet has discussed the issue. We have collective Cabinet discussions of issues, in the course of which—[Interruption.]

Mr. Speaker: Order. The House must allow the right hon. Gentleman to state his case.

John Reid: This is an important point about how we govern the country. Opposition Front Benchers are the first to declare at every opportunity that there is no collective Cabinet discussion. There is such discussion, and it results in decisions. Even when such a decision is known to have been reached some time in advance, its terms can still alter. The Cabinet meeting finished two hours ago. My right hon. Friend the Secretary of State for Culture, Media and Sport has been finishing the final version of the statement that she is to make in that period.
	Finally, I do not know on what evidence the right hon. Member for Penrith and The Border (David Maclean) based his statement that I was despairing this morning. First, I am not the type to despair and, secondly, that certainly did not happen this morning.

Mr. Speaker: I do not wish to prolong the argument. I can well understand that the Cabinet has to take a decision and that the Secretary of State for Culture, Media and Sport then has to prepare a statement to the House. However, the statement does not need to come before the House until circumstances allow the Opposition to be given at least an hour's notice, so that they have time to examine the statement. That is what I am saying today, and I would be very disappointed indeed if what I have heard were true. I remind the House that, less than a week ago, I used my discretion to allow a Minister to make a statement to the House at a rather strange hour. By all means allow the Cabinet to take a collective decision, but Opposition parties—I am not referring to the Conservative party alone—must be allowed an hour to examine a statement.

Eric Forth: I am sure that the House is grateful to you, Mr. Speaker, for your response. Quite apart from the startling revelation that this morning's Cabinet meeting lasted all of 20 minutes, the key point for the House—and for you, Mr. Speaker—is that the problem is partly due to the ridiculous new hours that we are forced to sit. The fact that there is now a conflict—

Mr. Speaker: Order. We will now get on with the statement.

Olympic Games 2012

Tessa Jowell: May I begin by saying how seriously I take the remarks that you, Mr. Speaker, have just made? I apologise to you and I want to assure the House that no discourtesy was intended. As the Opposition spokesman will make clear, as a matter of courtesy I took the trouble to ring him at 8 o'clock this morning and, about an hour ago, I spent some time taking him through what I was going to say. I similarly informed the Liberal Democrat spokesman.
	That said and placed on the record, the purpose of my statement is to inform the House that, following discussion in the Cabinet today, the Government have decided to give their wholehearted backing to a bid to host the Olympic games and the Paralympics in London in 2012. This morning, my right hon. Friend the Prime Minister telephoned Jacques Rogge, president of the International Olympic Committee, to inform him of our decision. He has told Mr. Rogge that the Government will back to the hilt the efforts of the British Olympic Association, to which I wish to pay tribute, alongside the Greater London Authority, the London development agency and others—[Interruption.]—and, of course, the Mayor as part of the apparatus of the Greater London Authority.
	The bid will be a huge stimulus for elite sport. Lottery investment in our athletes helped us to our best medal haul for decades at Sydney. A London bid will allow us to build on that and to raise standards and aspirations even higher. But our Olympic bid will also rest on our growing commitment to grassroots sport. It will be central to our efforts to increase physical activity, and identify, nurture and develop talent in our young and up-and-coming athletes.
	We want to harness the power of sport to inspire people and to address some of the key issues that our nation faces—health, social inclusion, educational motivation and fighting crime. We want to spread the benefits all around the country—promoting tourism and business for the whole of the UK, staging a four-year cultural festival, investing in community sports facilities to offer to the visiting teams to prepare and train here, holding football competitions as part of the games, and staging some other events outside London.
	I warmly welcome the pledge from all parties to support the bid. Such cross-party support is important, because it gives us the best chance of winning and of making the games a resounding success. I have previously set out for the House four tests, that an Olympic bid would have to meet before the Government could give it their backing. The tests were: can we afford it? Can we win? Can we deliver a strong bid and high quality games? What legacy would the games leave behind? We have spent the last few months applying those tests rigorously.
	I believe, on the basis of rigorous scrutiny, that a London bid passes those tests on every count. I would like to take the House briefly through each one. First, the cost. We estimate the cost of bidding will be about £17 million. Business, the London development agency and the Government will bear that cost. If we win the bid, the cost of the Olympics should be borne, at least in part, by those who will benefit most. I have therefore agreed with the Mayor of London a funding package of £2.375 billion, which includes a 50 per cent. contingency. Of that, £875 million will be borne by London through a £20 increase in council tax for band D properties and a contribution of £250 million from the London development agency. But the biggest contribution comes from the lottery. Contributions from the existing sport lottery and a new Olympic lottery game would raise an estimated £1.5 billion. We will review the package in 2005 in the light of what by then will be firmer and more detailed estimates of the costs of staging the games.
	The next test is whether we can win. Other confirmed bidders to date include New York, Leipzig, Madrid and Havana. No doubt others will emerge in the coming weeks. It is a strong field, but London has many advantages over the other cities, and our bid will be the equal of any. The third test is whether a bid could really be delivered. As the jointly commissioned Arup report shows, we can deliver a high quality and competitive bid based around an Olympic zone in the Lea valley.
	The last test is the legacy. The games will bring great benefits to London. The economy and tourism will benefit. The lower Lea valley will benefit from new facilities and regeneration. So the work starts now. I am perfectly realistic about the work involved and the risks that lie ahead. I know that public opinion will ebb and flow in favour of the project. We will set up a dedicated organisation to develop and market the bid, with the very best people from both the public and private sectors, and with strong leadership. The bid team will act at arm's length from the Government, but we will pull out all the stops to bring the Olympic games to London.
	Staging the Olympic games in 2012 is a prize well worth the fight, and 2012 is also the diamond jubilee year of Her Majesty the Queen. We are bidding because we believe that it will be good for sport, but it will also be good for London, and good for the whole of the United Kingdom. It is a declaration that we are proud of our country and confident of our ability.
	London is bidding for the Olympic games. We believe that it should host the greatest games on earth. We now have two years to prove to the world that we deserve to be given that chance.

John Whittingdale: I do not wish to dwell on the previous exchange, but I can confirm that the Secretary of State rang me at 12 o'clock and I thank her for that courtesy. She will also recall that I did at that time ask for a copy of the statement.
	I wish to move on to the content of the statement. First, I wish to make it clear that we welcome the Government's decision to support a London bid for the 2012 Olympics and Paralympics. Indeed, we have been calling for it for a long time. We strongly believe that a London Olympic games will bring incalculable benefits to this country in terms of investment, tourism, regeneration and, most of all, to British sport.
	The Secretary of State will be aware that we were originally promised a decision by the end of last year, but that it has been repeatedly postponed. Of course, we understand why that was necessary, but does she agree that, to avoid any impression that the Government are half-hearted in their intent, every member of the Government, starting at the very top, needs to give the bid full and enthusiastic backing from now until the day that the decision is made?
	Does the right hon. Lady also agree that one lesson of our failure to win a World cup bid is that we need a high-profile figure to lead the bid and tour the world to make the case for London? When does she expect to announce that appointment? Why does she appear to have rejected the strong recommendation of the Select Committee on Culture, Media and Sport that a Minister, located at the heart of Government, should have overall responsibility for co-ordinating the bid? Has not the absence of such a Minister plagued other projects and will it not make it harder to achieve the cross-departmental co-ordination and agreement that will be vital for a successful games?
	Does the Secretary of State accept that, if the bid is to be credible and command public support, it must be seen to have been fully costed and that, as far as possible, a thorough risk assessment has been made? So far, even the original Arup report has not been published in full. Instead, we have merely seen what the Select Committee described as an anaemic 12-page summary. Will she undertake to make available the full costings for the bid, including a breakdown both of the necessary expenditure and of the income that a successful games is likely to generate?
	We shall want to study in detail the proposals for how the costs of the games will be met, but we support the principle of using the national lottery to meet at least a part of those costs. The Secretary of State will be aware, however, that the lottery is badly tarnished and its income is falling. It thus becomes all the more important that she act quickly to restore public trust. Will she tell us what estimate she has made of how much of the money from the lottery will be taken from the amount that would otherwise have gone to the original good causes? Will the Government consider reducing that impact by giving up the share of the proceeds from a special Olympics game that they would otherwise take in tax?
	Does the Secretary of State agree that not only London but the whole UK will benefit from the Olympic games being held in the city? The burden should not, therefore, fall exclusively on Londoners. We shall want to study carefully the detail of her proposal for a council tax precept and how that figure was arrived at, but will she immediately tell us how long the £20 council tax increase will last? Does she accept that it is only fair that those who have the most to gain from a London Olympics should make the greatest contribution to the cost? Will she tell us how she expects to justify a council tax supplement for those living in boroughs on the other side of London from the Lea valley, who will receive nothing like the same benefit? Does she agree that it would be unacceptable for the Olympics to be used as an excuse for further tax increases for either London's hard-pressed businesses or its residents, and that any additional liability must rest with the Treasury?
	Does the Secretary of State agree that if a bid is to be successful, we must demonstrate that the necessary improvements in the transport infrastructure will be in place? Does she think that that should include the upgrade of the London underground, a new Thames crossing and, above all, Crossrail? If so, can she explain why, only two days ago, the Secretary of State for Transport was still unable to give a decision on whether Crossrail will go ahead? Will he make it his first priority to take a decision on those vital questions so that we can put an end to the uncertainty?
	Will the right hon. Lady say more about what the Government intend should be the legacy of the games? By then, London will already have a brand new stadium at Wembley. Is it the intention that, after the games, there will be two major stadiums in London, one of which will be exclusively for athletics, or will another purpose be found for it?
	If our bid is successful, the games will come to London in nine years' time. By then, we could be in the second term of the next Conservative Government. The Secretary of State has accepted that the attitude of the Opposition is an important factor for the credibility of a bid. Earlier this year, she said that she would consider our suggestion for a cross-party ministerial group. Is she willing to establish such a body or, if not, what mechanism does she propose to set up to ensure that all parties can participate fully in the preparations for a bid?
	It has taken a long time for us to get off the starting blocks, but the Conservatives are delighted that the Government have finally committed to a bid. We look forward to working with them and the British Olympic Association over the coming months to maximise the chances of its success.

Tessa Jowell: Having listened carefully to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) saying that he is in favour of the bid and supports it, I wonder what his questions would have been if he had been against it. I have never heard 12 such sceptical questions. He even finds it difficult to take himself seriously when he talks about the prospect of a Conservative Government.
	I shall deal first with the question about timing. The hon. Gentleman shows some ignorance of the Olympic process. It is clear that Paris took longer than London to decide whether to announce its bid. When the president of the International Olympic Committee spoke to the Prime Minister this morning, he commended the Government on the rigour of our approach and said that he could not fault it. We have made a decision based on all the necessary and available evidence.
	The hon. Gentleman asked when we would appoint the bid chair. There is urgency about that. He and the House should be reassured that work continued to proceed during the period when we were considering the case for a bid, and I hope that it will be possible to make an announcement about the key appointment of the bid chair in the next few weeks, and certainly before the end of June.
	It is important to remind the hon. Gentleman that, first, the proposal has been fully costed and, secondly, that it has been subject to preliminary analysis by the Office of Government Commerce to assess risk. He received a briefing on the Arup costs from my right hon. Friend the Minister for Sport.
	Instead of carping and talking down the national lottery, I wish that the Opposition would talk up the lottery as the Government do. There is a difference between public money and the public's money. The public's money is lottery money, which will come from people living all over the country, inspired by the prospect of the Olympic dream.
	The hon. Gentleman asked about the impact on good causes. We have taken that analysis very seriously indeed. The figures show that between now and 2009, there is likely to be an attrition of 4 per cent. to other good causes through the introduction of a new dedicated lottery game. That impact is validated by the National Lottery Commission. For the three years between 2009 until the games, the impact could be greater—up to 11 or 12 per cent. All the decisions are subject to review, depending on the performance of the lottery and so forth, because all the assessments have been made at the prudent end. The council tax precept will run for 25 years, on the basis that borrowing extends to £625 million.
	On transport, we have always made it clear that a decision to bid for and host the Olympics is not dependent on Crossrail. As the Secretary of State for Transport would say, if he were in the Chamber, even if Crossrail got the go-ahead tomorrow it would not be ready in time for 2012.
	On the legacy, we are absolutely determined that an Olympic stadium will not become a white elephant, as other Olympic stadiums have. That is why, as the hon. Gentleman must be aware, we have already begun discussions about a potential anchor tenant.
	I hope that I have done justice to the hon. Gentleman's questions and that we can count on the unequivocal, unswerving support of his party, because that will substantially reinforce and strengthen the chances of our winning in 2005.

Gareth Thomas: I congratulate my right hon. Friend on an excellent statement and pay tribute to her thoroughness in the promotion of a bid. I believe that our bid will be stronger for the time that we have taken to prepare for the statement today.
	Does my right hon. Friend accept that among the issues that must be at the heart of the bid team's work from now on is how an Olympic bid can be used to drive up participation in sport; to improve our sports facilities, many of which, especially in London, need renewal and refurbishment; and to develop our most talented athletes to be medal winners in 2012? If an all-party group of Back-Bench Members were formed to explore those and the other challenges facing the bid team, would she be willing to work with it?

Tessa Jowell: I thank my hon. Friend for his contribution and pay tribute to his advocacy and that of other hon. Friends in continuing to make the case for a London bid. It is an essential justification of a London bid that bidding for the Olympics is part of, not apart from, the Government's wider strategy for engaging more people in sport and identifying talent at an earlier stage. Earlier this week, I announced our new programme of talent scholarships, which will make financial support available to thousands of our most talented young athletes, who, without that extra money and support, would be denied the opportunity to reach their real potential. I would be delighted to work closely with an all-party group to support the Olympics and discuss with Opposition parties how to maintain understanding, consensus and a sense of working together to drive forward to deliver the bid.

Nick Harvey: I wholeheartedly welcome the statement and the Government's decision to back an Olympic bid. A London Olympics will be good for British sport at every level, good for London, putting it at the centre of the world stage, and good for the whole country.
	The Secretary of State says that the bid team will operate at arm's length from Government, but may we be reassured that there will not be too much distance between the two? The success of the Manchester games has shown that we can put on a very good show, but there is a credibility gap to be filled following the world athletics championships saga. Does she accept that, although the Prime Minister's involvement in the 2006 World cup bid was entirely positive, it transpired at the voting stage that other Heads of State had been massively more involved? We should learn a lesson from that.
	On funding, what assessment has the Secretary of State made of the impact on the other lottery good causes if there is a new game for the Olympics? May we be reassured that, if the lottery does not yield the anticipated sums or if the costs overrun, the Government will be fully behind the bid in a financial sense as well?
	The Secretary of State says that the bid is not contingent on Crossrail being completed. Can she explain how, as my hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes) has been asking, we shall get the spectators out to the new facilities without Crossrail?
	Finally, on the legacy, does the Secretary of State accept that some of the most successful games have had some of the least advantageous legacies, and that Government will need to be involved completely, from the word go, to ensure a legacy for London and the country of the best possible quality?

Tessa Jowell: I thank the hon. Gentleman and his party for their support for the London bid. We intend to implement a very clear structure for running the bid, at arm's length from Government but with accountability to what will be described as a public funders panel, on which I, the BOA and the Mayor will sit. I am the responsible Minister in Government and in Cabinet and I will report personally on progress to the Prime Minister.
	We have been very mindful of the problems that have arisen for large events in the past. We have learned the lessons of the Commonwealth games, not only about what went wrong at an early stage but also about why they were such a success and did so much for Manchester. The focus on social inclusion, the nearly 10,000 volunteers and the participation of people throughout the north-west are a real inspiration for London to try to emulate.
	The hon. Gentleman raised the concern about transport. It is important for hon. Members to know that a detailed transport plan is being developed with the Department for Transport. Money has been allocated. Substantial money is already going into the improvement in London's transport, but those who have signed off the transport proposals are confident that they are sufficient to move people around London during the games, and there is not now and never has been any suggestion at all that transport capacity for London during the period of the games is contingent on Crossrail. Stratford station will be expanded to enable it to handle 60,000 people an hour, Bromley-by-Bow station will be substantially rebuilt, and a range of specific improvements will be made to ensure proper management of transport.
	Finally, I accept the hon. Gentleman's point—it is a serious lesson—that we must address the legacy now, which is why we have emphasised the importance of ensuring that the stadium that will be the centre of the world during the Olympic games also has a useful life afterwards and that we do not have a stadium that, as Sydney has found, is a constant drain on the public finances.

Barry Gardiner: I congratulate my right hon. Friend on the fairness with which she and colleagues in her Department have approached the bid. Does she agree that, although the immediate benefits of hosting the games in London may be for the people of London, in fact it is the children who are now in years 7 and 8 in schools in Aberdeen, South, in Glasgow, Pollok and in Cardiff, Central who will be winning Britain the gold medals at those games, and that if those games are truly to have a legacy that is spread throughout the country, we must press ahead with the programme for school sports co-ordinators, and with getting coaching into schools, to get those young people the expertise that they need to become our gold medallists in 2012?

Tessa Jowell: I could not agree more. This morning, I spoke to two of our Olympic athletes, Matthew Pinsent and Paula Radcliffe, whose personal advocacy for the games has been incredibly persuasive. Of course they, as role models and great icons for our young athletes, understand precisely the importance of my hon. Friend's point.

Richard Ottaway: I give my unequivocal and unswerving support, and congratulate the Secretary of State on piloting the whole process this far. I welcome her reference to the Paralympics, whose United Kingdom branch is based in Croydon, and which is often forgotten in such circumstances.
	May I probe on the question of cost overrun? The right hon. Lady said that the precept will last for 25 years in London. If there is a cost overrun, will that precept be extended or will the overrun be underwritten by other sources?

Tessa Jowell: The funding package that I have announced today, to which the Mayor is also a signatory, includes within it, based on the Arup figures, a contingency of at least £1.1 billion, so there is a very substantial contingency. In 2005, when we know whether we have won, we will obviously take stock of the costs in the light of what will by then be greater certainty about the figures. At that point, we will judge whether further contingency provisions need to be made and whether further provision that will go back to the original funders will be needed to protect the taxpayer's position, but at this stage, beyond saying that we have recognised the need for that further examination, it is not particularly constructive or useful to go into more detail because the figures may change in the interim.

Bridget Prentice: I am delighted by my right hon. Friend's statement today; it shows confidence and pride in London that we should all appreciate and share. The whole country should appreciate the benefits that will come to London in terms of not just sport but tourism and regeneration. Will she perhaps expand on her statement to reassure people elsewhere in the country that they, too, will benefit whether from events during the games, or in economic and other terms thereafter?

Tessa Jowell: I thank my hon. Friend, who has been a constant advocate for the games and recognises the economic and other benefits that will come to her constituency as a result of our decision today. We made as careful an assessment as we could at this stage of the wider benefits, and it is worth noting that all the regional development agencies have expressed their support on the ground of the benefits to their regions of the games hosted in London produced by inward investment driven by tourism. It is essential that we see that as one of the important measures by which we judge the success of the games. Of course the way in which we spread the benefit is by our continued investment in grassroots sport and in sport for children in school, to build the opportunities for the champions of tomorrow. As my hon. Friend the Member for Brent, North (Mr. Gardiner) remarked, we hope that children from Inverness to Truro will have the opportunity to compete when the time comes.

Julie Kirkbride: Like all other hon. Members who have spoken today, I congratulate the Secretary of State and the Government on having the courage and the vision to take forward the Olympic bid in what could be a fantastic year to celebrate Her Majesty's jubilee if we were to be successful. The Secretary of State will face scepticism from some of the public, not least in regions such as mine, where people still do not quite understand why the bid has to be based on London. I understand that it needs to be London, but will she tell the House why it needs to be London and spell out the prospective benefits for people in the other regions, who will feel disappointed?

Tessa Jowell: I have considerable sympathy with the hon. Lady's view. Of course, we did not rush to take a decision that London should be the bidding city without looking at the case for the alternative, but the simple fact is that the British Olympic Association advised us that the only way that we would stand a chance of winning would be to bid for London. That is why we are bidding for London—we are absolutely determined to do everything that we can to win.

Roger Casale: I welcome the statement and the exciting prospect of the Olympics coming to London. Does my right hon. Friend agree that, if we are to win the wholehearted support of Londoners—and, indeed, of people across the country—for the bid, we must create as many opportunities as possible for people to engage with the bid's preparation, advance their own ideas and contribute their experience both to improve the bid and to identify how they could benefit if it is successful? With that in mind, may I remind my right hon. Friend that, although we no longer have football in south-west London, at least not in my constituency, we have experience of tennis and other sports? We in south London as a whole will consider—this has sometimes not been the case in the Mayor's considerations—how we can benefit, in particular, by improving the transport infrastructure if the bid is successful.

Tessa Jowell: I thank my hon. Friend, and hope that when the bid team is appointed and gets under way, precisely the imagination that he describes will be applied to ensuring that the Olympics means something to people throughout the country, not just in London, and to people of all ages as well.

Nick Hawkins: I too unequivocally welcome the announcement that the Secretary of State has made today. She knows that I have been a passionate advocate for an Olympic bid. Does she recognise that there will be particular pleasure in my constituency because, as she will know, there is only one venue in the UK that was used for the 1948 Olympics that will be used in 2012? That venue is Bisley, for shooting, which straddles the boundary between my constituency and that of my hon. Friend the Member for Woking (Mr. Malins). Will she be happy to work with all members of the all-party sports group, of which I have the honour to be deputy chairman? Of course our chairman, Lord Pendry, sits in the upper House, so he is not with us today. Does she agree that all hon. Members from whichever party have to recognise that far more of our constituents care about sport than about politics and that the bid should be a unifying force? I passionately hope that we win it.

Tessa Jowell: I thank the hon. Gentleman, and I certainly agree that in any vote sport would have it over politics with all our constituents. Bisley was an extremely successful location for shooting during the Commonwealth games. Clearly, his constituents will look forward with excitement to the possibility of being part of the Olympic facilities.

Jim Dowd: May I enter a more sceptical note than seems to have been the case so far? May I tell the Secretary of State that I am persuadable on the matter, but at the moment, I am not sure that this is a wise move, and many of my constituents share that view? Given that Greater London Authority ratepayers have experienced a 30 per cent. increase this year alone, may I ask her about the £20, 25-year fund? Can she clarify whether it will start at £20 and remain like that over the 25 years, or whether it will start at £20 and end up with a much higher figure? Can she confirm that the total exposure if the bid is unsuccessful will be £17 million, which she identified, and will she say how that figure will be broken down and who will pay for it? What proportion of that £17 million will be allocated to the entertainment, wining and dining, inducements and downright bribery that have been the hallmark of Olympic bids?

Tessa Jowell: My hon. Friend is consistent in his scepticism, and I hope very much that we will prove him wrong during the months and years ahead. I think that he will take heart from the fact that there has been overwhelming support not just from people in London, but from people throughout the country. The results of the opinion polling that my Department undertook as part of the preparation for the bid were extraordinarily consistent. He refers to the costs of bidding. Those costs will be shared between the public sector and the private sector. The cost identified is up to £30 million, half of which we expect to come from the private sector and half of which will come from apportionment between the London Development Agency and my Department. There will be some acceleration in the built facilities, and we expect that work will start on an Olympic pool at Stratford ahead of a decision on whether we have won. That is an important legacy point because that part of London needs an Olympic-sized pool. I hope that that is one bit of evidence to show how the principle of ensuring a good legacy informs decisions even at this early stage.

Simon Hughes: Ministers know that I am 100 per cent. enthusiastic and committed to the bid, and if I have the privilege of being elected Mayor of London next year, I will give the Government my full support and co-operation, and make sure that we do not just win the bid, but go on to have a brilliant Olympics. In addition to the funding proposals that the Secretary of State has set out, which work out at £500 per band D household in London—not an excessive amount over 20 years—can she tell us whether, if we win the bid, the Government will reconsider whether they should put something into the kitty? At the moment, there is money in the kitty only for the bid, not for the Olympics. What is the legacy for transport, housing and jobs? As a London Member of Parliament, she knows that improvements to those will be to the benefit of London for a generation or more, and to the benefit of the country for a generation or more, too.

Tessa Jowell: I thank the hon. Gentleman. Clearly, the support for the Olympic bid will be a rare moment of consensus in the forthcoming mayoral campaign. Let me address his specific points about transport, housing and jobs. On transport, I have already identified the way in which transport infrastructure will be improved: specifically, the extension of Stratford station and the rebuilding of Bromley-by-Bow station, to ensure that they have the necessary capacity. There will be more improvements: the upgrading of certain rail links, the upgrading of motorway links and so forth. A programme has therefore been identified and costed.
	On housing, the Olympic village will have accommodation for 4,000 people. After the Olympics, that will become housing for people moving into the regenerated Thames gateway. On jobs, the estimate is that the Olympics will generate in the region of 10,000 jobs between now and 2012–13. Not all of them will be permanent long-term jobs, but that is a huge boost for employment in east London.

Andrew Bennett: Will my right hon. Friend accept that given the corruption in the Olympic movement, the problems of drugs in some of the sports involved, and the overheating of much of the London economy, many people are not very pleased with her announcements today? Will she give a guarantee to the House that it will be paid for by the people of London, and will not be paid for at the expense of transport links, regeneration links and sport facilities in the English regions?

Tessa Jowell: In relation to my hon. Friend's point about the International Olympic Committee and its past reputation, we must recognise that that is in the past. Its reputation suffered seriously, and Jacques Rogge, the new president of the IOC, has taken vigorous and rigorous steps in rewriting the rules to ensure that corruption, wherever it is identified, is not part of the Olympic system. Tight rules are being drawn up, and it is important that we recognise that progress. On his second point, yes, London will pay a major part of the cost of the Olympics, but the lottery will do so too. That is important because of our ambition and aim that the Olympics should belong to the whole United Kingdom and not just to London.

Michael Fabricant: Despite my natural disappointment that the west midlands has not been chosen, the right hon. Lady is right to choose London. The experience of the Manchester bid showed that, unfortunately, the bids have to be based on cities that other delegates, from other parts of the world, recognise. That is unfortunate but true. She was wrong, however, to chastise my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) for asking about the details of costing, because the devil is in the detail. We know from the dome that while it was a good idea, costs spiralled out of control. We would therefore welcome more detail in the near future. In that respect, as the right hon. Lady recognises that the legacy is important, when will the detailed transport plan be published? That is important, given the transport difficulties in Atlanta and Sydney.

Tessa Jowell: I am glad that the hon. Gentleman is so in touch with reality that he realises that the choice must be London not Lichfield. In relation to the steps that we have taken on costings, even at this stage—let us remember that we are talking about costings that will be realised in nine years' time—my right hon. Friend the Minister for Sport and I have visited six previous or prospective Olympic capitals precisely to make a proper assessment of what running an Olympics costs. Jacques Rogge, the president of the International Olympic Committee, has commended the exemplary approach of the Government in preparing to make this decision.

Alan Keen: I was lucky to have been taken to see the 1948 Olympic games, when Herne Hill was the site for the cycle track events and Windsor Great Park for the road race. It inspired me to pursue a lifetime of active sport. Although I do not usually mention politics and sport in the same sentence, I was so inspired this morning by the shadow Secretary of State's optimism that he would be in the second term of a Tory Government in 2012 that I am going straight home to get my bike out. Whatever important position he holds in 2012, I hope that he will present me with a gold medal for the 1,000 m sprint. Let us hope that this is the last time that we mix sport and politics. Let us all work together to make sure that we win the bid and host a wonderful games.

Tessa Jowell: I thank my hon. Friend for that characteristically generous contribution. Opposition Day

[6th Allotted Day—First Part]

School Funding

Mr. Deputy Speaker: I should say to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. A 15-minute limit has been placed on Back-Bench speeches during this debate.

Damian Green: I beg to move,
	That this House condemns the Government's handling of the school funding crisis; regrets that the jobs of teachers, teaching assistants and other support staff have been put at risk; further regrets that these teacher redundancies, together with other cut backs imposed by the funding crisis, will have a negative impact on the education of school children; notes that Labour councils have been as badly affected as Conservative councils by the funding crisis; condemns the Government for seeking to blame local authorities for this crisis; further notes the statements of head teachers and governors across England who no longer trust the Government's ability to administer school funding; recognises the impact of the funding crisis on the Government's teacher workload agreement; believes that the Government's flawed reforms of school funding are to blame for the crisis; and calls on the Government to simplify the school funding system, giving more money direct to schools and giving head teachers more control over how to spend that money.
	I am delighted that the House and its proceedings are impinging on this Government for once. We called for this debate because the crisis in our schools is serious and wide-ranging, and the Government were forced into a response this morning in an attempt to provide themselves, prior to the debate, with a fig leaf. I welcome the fact that the House can still have an effect.
	Sadly, however, what we have seen today is a panicky short-term response that takes money out of one pocket in a school's budget and inserts into another pocket. What we should be hearing from Ministers today is an apology to heads, teachers, local authorities and parents for the spectacular cock-up that they have made of this year's education budget. Instead, they seem determined to lay the blame anywhere else.
	Since the Secretary of State has been forced into rushing out the announcement of the various pieces of sticking plaster that he is trying to put over this wound, can he answer some specific questions when he addresses the House? He is telling schools to raid their capital budgets and reserves to try to avoid teachers and teaching assistants being sacked. Can he tell the House what happens to a school facing a huge budget deficit that it cannot cover from reserves or capital, that has a central heating boiler that has just failed or a roof that is leaking directly into the classroom, and that does not therefore have capital available to try to pay salaries?

Henry Bellingham: I am sorry to intervene on my hon. Friend so early. On the point of capital expenditure, however, is he aware that a school in my constituency, Reffley county primary, which is a beacon school and one of the best and biggest primaries in Norfolk, will be short of £93,000 just by standing still? It has no money in its capital budget, and no surplus funds, and it will have to get rid of five teaching support staff. What kind of signal does that send to hard-pressed teachers and parents in Norfolk?

Damian Green: My hon. Friend raises a serious point. All over the country, in his constituency and elsewhere, schools will be looking at the detail of what the Secretary of State announced this morning, just as they looked at the detail of the spending announcements that he made some months ago, and they will realise that whatever hype comes from the Government, they will be worse off. If the measures that he announced this morning actually work in the schools facing the worst problems, the effect will be random.

Tony Lloyd: rose—

David Wright: rose—

Damian Green: I will give way to the hon. Member for Telford (David Wright).

David Wright: If we assume that the hon. Gentleman does not want to see any resource removed from any local education authority, how much more money does he think that he would need to commit, as a representative of the Opposition, to make it all the better?

Damian Green: I would commit that when the next Conservative Government spend money on education, we will spend it in schools rather than on bureaucracy.

James Purnell: rose—

Jonathan R Shaw: rose—

Damian Green: I will make some progress. I know that the hon. Gentlemen will have many problems in their constituencies, from which their schools are suffering, which I am sure that they will wish to draw to the House's attention.

Ivan Henderson: rose—

Damian Green: In the meantime, perhaps the hon. Gentlemen would like to listen to the very sensible comments of the National Association of Head Teachers on the Secretary of State's announcement this morning:
	"Converting capital into revenue and licensing deficit budgets could help some schools but these measures, that are akin to 'rearranging the deck chairs on the Titanic', will not provide the relief that all schools in trouble desperately need now."
	In addition to the fact that raiding capital budgets is not really a solution, it will cause immediate problems. I am especially worried about the effect on special needs provision. If the Secretary of State tells schools to spend their capital on teachers' salaries, what will happen to schools that need to rebuild classrooms to provide proper access for pupils with disabilities? That is now a legal requirement, as he knows, so I hope that the Government have thought through all the implications of today's announcement, especially the way in which they will affect some of the most disadvantaged children in Britain today.

Anne Campbell: I am astonished to hear the hon. Gentleman speak in such terms because the previous Conservative Government's term in office was characterised by crumbling schools. Is he aware that under John Major's Government, schools in my constituency lost money every single year? Since 1997, Cambridgeshire has received a 16 per cent. increase in cash funding for schools.

Damian Green: If the hon. Lady is worried about crumbling schools, does she support her Secretary of State who has today proposed to raid the capital budgets of schools throughout the country? Her logic escapes me.

Patrick McLoughlin: I am grateful to my hon. Friend for giving way because rather than being given history lessons, most people in education want to know what will happen this year and what the effect will be on their jobs. I received a letter from Turnditch primary school, which is a small primary school, commenting on the changes that the Secretary of State has made to the standards funds, among other things. It says:
	"In other words, our total budget has gone from"
	£179,000 to £180,000, or
	"an increase of . . . 0.62 per cent."
	The school does not know where the extra money that the Secretary of State talks about has gone.

Damian Green: My hon. Friend makes a powerful point. I shall address directly the point about the capital budget. The Secretary of State knows that when we approve of things that he does, we do not indulge in knee-jerk opposition. Before today, such approval was given to the way in which he took seriously the need for steady flows of capital to keep the fabric of our schools up to date. The fact that that sensible part of the Government's education strategy has been ditched is a sign of the level of panic in the Department for Education and Skills. Schools will suffer in the long term.

Several hon. Members: rose—

Damian Green: I shall make some progress.
	The Secretary of State rightly sets great stall by the development of specialist schools. He knows that schools in deficit cannot apply for specialist status, yet he has today encouraged schools to go into deficit. He is firing an accurate torpedo into his plans for a rapid expansion of the specialist school network.
	The written statement that the Secretary of State put before the House today fascinatingly says:
	"2003–04 is a unique year, because of both the extent of changes in the system for funding schools, and one-off pressures relating to teachers' pensions and National Insurance."
	He knows that announcements on taxes are a matter for the Chancellor of the Exchequer. Is he committing the Chancellor not to impose further national insurance increases for the rest of the Parliament and if he is, has he told the Chancellor? If he is not saying that, his reassuring written statement has no value at all. I know that relations around the Cabinet table are worse than ever but if spending Ministers start pre-empting future Budgets, we ain't seen nothing yet.

John Redwood: My hon. Friend is making an excellent case. Does he agree that the absurdity of rip-off government is shown by the fact that many of the taxes wrongly imposed on the British people have been a boomerang on the public sector and have made it impossible for schools to spend what they want? Schools are not receiving the money that they should because so much is wasted, while money that they do get is used to pay taxes.

Damian Green: There is a circular flow of money from taxpayers' pockets into the Chancellor's pocket, but it never seems to reach the public services on which the British public want the money to be spent. That is one of the Government's central failures.

Jonathan R Shaw: How does the hon. Gentleman envisage the future of local education authorities, and would he abolish them? They have been successful and Kent local education authority, which has secured £60 million of private finance initiative credits, has been especially successful. One of the five schools affected by that is the North school in the hon. Gentleman's constituency. What would be the future of LEAs under the Tories?

Damian Green: I am happy to join the hon. Gentleman in paying tribute to Kent LEA, which is run by an extremely good and successful Conservative council.
	It is worth analysing how on earth the Government found themselves in this predicament. They have introduced more than 60 tax rises since 1997 and they spend more than £50 million every hour. Even in my most oppositional mood, I would not have expected our schools to be plunged into what the head teacher Michael Chapman, who was speaking on behalf of head teachers in east Yorkshire, said was
	"far and away the worst budget settlement I have had to manage as a head teacher".
	What a contrast there is between the problems faced by schools and colleges throughout the country and the jubilant words that surrounded last summer's spending announcement. Let us remember the incredible hubris displayed by Ministers at the time of the spending review. The Chancellor had raised taxes a few months earlier and the record £12.8 billion increase promised for the next three years would, according to the then Education Secretary, the right hon. Member for Birmingham, Yardley (Estelle Morris),
	"deliver higher standards, better behaviour and more choice".
	She promised:
	"investment will be matched by radical reform".
	The edifice that the Government lauded at the time has fallen apart so spectacularly and quickly that it should embarrass even the Minister for School Standards, who bears direct responsibility for the relevant part of the Department for Education and Skills' budget.

Nick Hawkins: My hon. Friend is making a powerful case. Does he appreciate the concerns of people in schools such as Collingwood college in my constituency, which was a flagship grant-maintained school under the Conservative Government? Its chairman of governors, with all-party support, is writing to me to protest not only that Surrey local education authority has effectively received almost no funding increase, but that any increase that it passports to schools is more than wiped out by the increased cost of national insurance payments. Collingwood college and other schools in my constituency and south-east constituencies have experienced a net loss. Unless the Secretary of State does something about the situation, redundancies will be made next Wednesday morning. Surely that reinforces the urgency of the matter.

Damian Green: It does reinforce the urgency of the matter and it is a shame that Labour Members do not seem to take that seriously.
	We need to know why the situation occurred. The school funding system has foundered on the three vices that the Labour Government cannot resist: hype, centralisation and a refusal to accept responsibility when things go wrong. The promises of investment and reform have proved to be as empty as they were grandiose. There is no doubt that the Government are taxing and spending more than ever but what they give with one hand, they take away with the other.
	The £2.7 billion extra for schools to which the Prime Minister still referred yesterday has proved to be an incredible shrinking pot of money. By last December, it had been scaled down to £1.4 billion. Two months ago, the increase—classed as "missing"—was just over £500 million. According to the Minister for Schools Standards, it then became £250 million. Today's announcement means that we can assume that the Government are finally and belatedly admitting that the trumpeted increase was in fact a cut and that schools are being encouraged to raid other budgets to fund their basic spending.

Several hon. Members: rose—

Damian Green: I think that the hon. Member for West Bromwich, East (Mr. Watson) wins.

Tom Watson: I award the hon. Gentleman grade A for effort for sketching out a higher education policy after 604 days in office. Will he use today's debate to sketch out a policy on secondary education? Would he match the Government's investment in secondary education, or will he tell us where he would make cuts?

Damian Green: I am grateful to the hon. Gentleman for mentioning our policy on higher education, although I was not planning to do that. I am sure that the policy is more popular among Labour Members than the Government's policy on higher education. I dare say that at some stage we will put that to the test in the House.

Ivan Henderson: Will the hon. Gentleman give way?

Damian Green: No, I must make progress.
	The Secretary of State then told the Secondary Heads Association that he did not believe that schools had budget problems and that schools' complaints were just "a game". The previous day, he responded to the concerns of the Association of Chief Education Officers by saying:
	"I don't listen to what you say quite frankly."
	That was not worthy of the Secretary of State.
	It is not just that the Government have fundamentally mismanaged the funding crisis. They have wilfully fiddled the local government funding settlement in a way that has made the problem in our schools worse. The Government argue that they provided an above-inflation grant increase for all councils. Such an argument is at best simplistic and at worst simply wrong. Local authorities' costs have risen faster than central Government funding as they have imposed countless new regulations, obligations and red tape. We know, and schools know, that the pay, pensions, national insurance increases and standards fund changes have taken away most of the extra funding for every school and more than the total of the extra money for too many schools.
	We need to examine how much central Government actually fund of what they estimate each local authority should be spending. According to research from the House of Commons Library, that ratio fell from 76 per cent. in 1997 to 73 per cent. in 2002–03. In other words, the Government are funding less of local authority spending needs from the centre and the shortfall has to be made up in higher council tax.
	There is nothing fair about the local government settlement this year, but even with the gerrymandering that the Government have gone in for they have managed to create acute funding crises even in Labour local authorities. The fact that they have managed to do that owes much to the complexity of the system that they have created and the obvious flaws that have now been revealed. The Minister for School Standards, with whom I have debated the matter in the media over the past few weeks, claims that he understands it—but judging by the crisis that he has presided over, he does not—and that mere mortals cannot understand it. The fact is, however, that it clearly does not work.
	There has to be a better way. When local authorities, such as Wandsworth, which has much deprivation but also an excellent Conservative council that works hard to deal with its problems, suffers because it is too successful and has too many pockets of relative affluence, then something is wrong. There are rich people in poor areas and poor people in wealthy areas. The current system, for all its complexity, fails to deal with those problems in any adequate way.

Ivan Henderson: The hon. Gentleman is right to say that schools have been under enormous pressure in the past few weeks. Will he explain why Tory-led Essex county council has held on to £21 million in those weeks and told my schools that it has no money to give them? Why has it sat on that money and kept those schools under so much pressure?

Damian Green: The hon. Gentleman should keep up. His Secretary of State stopped trying to blame local authorities for the crisis a few weeks ago.
	The Government's policy is over-hyped and over-centralised. The next phase is to deny responsibility, as the hon. Gentleman just sought to do, but that will not wash because the current situation is the result of a breakdown in communication from the centre. The Government and Labour Members know that scores of schools around the country report that they are going into budget deficit. A good example of that is the Fairway middle school in Norwich, where the chair of governors, Alison Black, made it clear in a letter to the Secretary of State—her Member of Parliament—that her school was facing the distinct possibility of having to make all seven of the school's teaching assistants redundant. It is surely a strange situation when only months after the Department announced that it saw a greater role for teaching assistants, they are under the threat of redundancy.

Charles Clarke: Just to inform the House that I met my constituents to discuss that and they are making no redundancies at Fairway middle school.

Damian Green: This year possibly. Perhaps the right hon. Gentleman would like to respond to Richard Arrowsmith, the head teacher of Grove school in Market Drayton, who summed up the situation perfectly. He said:
	"We have lost confidence in the Government over the way in which school finance is administered . . . With cuts outstripping the funds available for extra support staff, it will also be difficult for us to reduce excessive workloads on teachers."

Keith Simpson: My hon. Friend is aware that the Secretary of State is the Member of Parliament for Norwich, South, and he just replied to a specific constituency point. Does he know that in a conversation that I had with Norfolk education committee last night, it stressed that it is working hard with local schools but still anticipates 92 redundancies? Teachers and governors are in no doubt where the blame lies—it lies with the Secretary of State. It has been documented in dozens of letters and e-mails through the local Eastern Daily Press. The buck stops with him.

Damian Green: My hon. Friend is right. There is a crisis in the Secretary of State's constituency and crises in many other constituencies, too. In the week when the Government launched their new strategy for London schools, we hear reports of the man that they have in charge, Tim Brighouse, saying:
	"this is the worst of times"
	and
	"It is the worst dislocation of funding we have all experienced in our own working lifetime."
	When the London schools tsar criticises the Government like that, Ministers' complacency is completely out of place. That man has been brought in by Labour to lead education reform in the capital.
	On top of all that, Sir Jeremy Beecham, a leading Labour councillor and leader of the Local Government Association, said:
	"Local councils are not holding back millions of pounds. Much of these funds are being allocated to a range of educational needs and some are due to be distributed in the year."
	Rather than the Department leading the partnership with all those people, we instead have confrontation and a breakdown of communication that has succeeded in alienating teachers, heads, local authorities, teacher unions and the Local Government Association. The problem is not just a one-year problem. It will continue to haunt schools in future years. Making them dig into their reserves to fund the Department's mistakes will only make matters worse and it attacks the financial security of all schools that have to do that.
	One long-term effect of the Government's policy is that it will damage their so-called historic work load agreement, which has promised so much and, on current progress, will deliver so little. Only last week, the National Association of Head Teachers, one of the teacher unions that signed up to the agreement originally, said that it would be "impossible to implement" because of the Government's cuts and that it was considering pulling out of it. On top of that, reports last week showed that the work load agreement will only continue to add to the pressures that schools face, with costs of teaching assistants expected to rise by up to 40 per cent. in some local authorities. So those schools that are short of cash now will have to contend with even more problems in the future.
	The long-term solution is a radical simplification of the funding system. The Government can no longer introduce dozens of different funding streams, each one representing a new gimmick to provide a ministerial press release. Even when they are good and useful gimmicks, the cumulative effect of the constant fiddling is to leave schools unable to take decisions. Let us take power away from Ministers and give it to heads and governors so that they make the key decisions about priorities in their schools.
	Ideally, we need to introduce a national funding formula so that never again are schools forced into a situation like the current crisis. Schools should know where they stand with regard to their funding and should be able to set budgets accordingly, securing their financial future. Instead of that, we have a classic new Labour crisis, which goes through several phases: the grand announcement, the ministerial boasting, then the investigation of the small print, the rumblings of discontent, the explosion of the crisis, the desperate search for a scapegoat, and eventually the humiliation of the ministerial climbdown. We saw it with individual learning accounts; we saw it with the A-level crisis; and now we have seen it with school funding.
	But this crisis is too important to remain with Ministers. For once they do need to accept responsibility. Let me give them one last example from a head who phoned me less than an hour ago, Mrs. Maureen Martin of Coloma convent girls school, a comprehensive in Croydon. Her school is short of £400,000. It has no reserves and her capital budget, which the Minister wants her to raid, is £77,000. Today's announcement does not lift the cloud over her excellent school, and she, for one, is not being taken in by the ministerial spin.
	I hope that Ministers reflect on their work. If one teacher or one teaching assistant is made redundant as a result of the present crisis, one Minister should follow suit. I suspect that the Minister for School Standards is first in the queue, but I dare say that those who are trying to rescue our schools system will not mind. The Government have let down heads, parents and teachers throughout the country, and it is time that Ministers took responsibility for their failures. I commend our motion to the House.

Charles Clarke: I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
	"applauds the increased funding that the Government has made available to LEAs since 1997, which is up in real terms from £2,800 per pupil to £3,600 for 2003–04, with further planned increases to almost £3,800 by 2005–06; notes that the increase in funding for 2003–04, at £2.7 billion, more than covers the additional cost pressures from pay, pension and price increases; recognises that the new LEA funding formula constitutes a welcome move towards a fairer distribution between LEAs, but coupled with the changes to the Standards Fund has resulted in some turbulence in the system; endorses the action the Government has taken in response, namely to provide a further £11 million to London authorities and £28 million to authorities with the lowest overall increases; further notes that the performance pay grant for 2003–04 has been increased to meet all of schools' commitments arising from the grant provided in 2002–03, and to cover the costs of similar progress for teachers becoming eligible for performance pay in September; welcomes the decision by the great majority of LEAs to pass on in full the increase in schools funding to their schools budgets; supports the work the Government is doing with LEAs to understand the decisions they have taken in distributing their funding between central services and the individual budgets of schools; welcomes the further measures the Secretary of State is taking to provide LEAs and schools with flexibilities to avoid excessive instability within schools; and calls on the Government to consider what changes are needed for next year."
	I am delighted to have the debate. I am sorry that the hon. Member for Ashford (Mr. Green) was not able to persuade the shadow Cabinet to hold it two weeks ago, as he announced to the National Union of Teachers conference, but it is important to be able to debate the subject fully and directly. We ought to start with the origins of the situation.

Keith Simpson: Medieval history.

Charles Clarke: Not medieval history, but practical politics today.
	The funding of schools is a shared responsibility between national and local government, and we have shown over the recent period, and will show in future, a determination to work together to resolve the issues. I take the national level first. We allocated an increase in spending of £2.7 billion to schools in this year. The funding pressures, including teachers pay, pensions and national insurance—the various issues highlighted by the hon. Member for Ashford—were about £2.45 billion nationally, so we had an excess over the funding pressures of £200 million to £250 million.
	The funding was at a level of about 11.6 per cent. per pupil increase in that year—a significant increase. It was, by the way, the continuation of a long record of education investment since 1997, which has led to an extra 20,000 teachers across the country, an extra 80,000 support staff, and 20,000 schools benefiting directly from investment in them—a sharp contrast with the 20 per cent. cuts in education proposed by the Opposition.
	There were two national changes—

Michael Fabricant: On a point of order, Mr. Deputy Speaker. The Secretary of State may have inadvertently told an untruth to the House. As you know, no such cuts are being proposed.

Mr. Deputy Speaker: That is not a point of order. It is a matter for debate.

Charles Clarke: I am happy to respond. On "The World at One" on Radio 4 on 30 December 2002, the Leader of the Opposition said that his colleagues, including the shadow Chief Secretary,
	"are looking at the target of 20 per cent. savings across the board in Government spending. That's what we are looking at, and we are beginning to come up with figures that will build towards that total."
	That is 20 per cent. right across the board. If the Opposition want to come off that figure, they should do so, but they have not.

James Purnell: Has my right hon. Friend noticed that the Tory policy on higher education involves a 20 per cent. cut? Has he noticed that the Tories have guaranteed the defence budget and the international development budget, but not the education budget? Is it not, therefore, the height of hypocrisy for them to call a debate on funding, when they are secretly planning to cut it?

Charles Clarke: My hon. Friend is right. We hope that the hon. Member for Ashford might win some of his battles in the shadow Cabinet and get a commitment to education spending, alongside those to other Departments.

Julian Brazier: Can the Secretary of State confirm to the House that the funding pressures on Kent, which has received an increase in its education budget that amounts to only just over half of the funding pressures, will be repeated under the local government settlement plans for next year and the year after, so that the remarkable achievement whereby Kent has managed to passport through all the money that the schools need this year will be impossible to repeat for the next two years?

Charles Clarke: I shall come to that point in a moment. There is well over £10 million still to be allocated by Kent to individual schools, and I hope and am confident that it will do so.
	As the hon. Member for Ashford said, there were two significant changes in the distribution of the national resource this year. The first is the change in the local government funding formula, to which he referred, whereby we introduced a 3.2 per cent. floor for all local education authorities to deal with the situation. The second was the decision to shift the standards fund to local government, for which colleagues in local government had pressed for a considerable time. Those changes have led to distributional effects that, as I have long acknowledged, give rise to particular issues. But the national funding has been more than enough to cover the funding pressures.

John Bercow: Given the Secretary of State's unwise fulminations against local education authorities, and the fact that £1.2 million in leadership incentive grant has not been allocated by Buckinghamshire county council because he has not given permission to the authority to do so, does he understand why, on 23 April this year, I received a letter from a teacher in my constituency who wrote that if there were A-levels in bullying, arrogance and incompetence, he would pass all three with flying colours?

Charles Clarke: I am grateful for the compliment from the hon. Gentleman. I shall deal directly with Buckinghamshire, to answer the point that he raises.
	Each local education authority has taken four decisions about distributing money to schools in its area: first, whether to passport the money through; secondly, how much to keep in its central schools budget for the LEA as a whole, and how much to distribute to individual schools; thirdly, how much to allocate from its own revenue to capital; and fourthly, what local formula the money is spent on.
	The Government position on each of those aspects is clear. First, the money should be 100 per cent. passported. Secondly, the money that goes should be passed on to individual schools, and that is where it should be spent. Thirdly, the revenue should be spent principally on revenue, because there is other capital funding. I shall deal in a moment with the point raised by the hon. Member for Buckingham (Mr. Bercow). Fourthly, the local formula should be fair and not give very high increases to certain schools, and very low increases or even decreases to others.

Phyllis Starkey: My right hon. Friend will know that Buckinghamshire county council has demonstrated a 10 per cent. variation in the funding that it gives to different schools. He will also be aware that in attainment in schools in Buckinghamshire, there is an extraordinary fourfold difference in the percentage of pupils in secondary schools gaining five GCSEs. Has he looked to see whether the variation in funding is aimed at improving performance in the schools performing poorly, or the opposite—giving even more money to schools that are already favoured and taking money away from less favoured schools?

Charles Clarke: My hon. Friend is right. I shall come to Buckinghamshire in a moment, as it illustrates the point that she makes to articulately.
	I hope that the Conservatives and Liberal Democrats will make clear their positions on these issues, as I have done. Conservative Westminster has passported only 73.8 per cent. of its budget. Conservative Wandsworth, which the hon. Member for Ashford favoured, has passed on only 92.9 per cent. of its increase. It is a bit of a nerve to cite Marylebone school when it is his own Tory friends in Westminster who are not providing the funds for Marylebone schools. I hope that the Lib Dems will explain why Liverpool city council has passported only 94.9 per cent. of its budget through.
	My position is clear. I urge all authorities to passport 100 per cent. of their money. My challenge to the Conservatives and the Liberal Democrats is for them to commit themselves to the same approach in relation to their political colleagues. With reference to Westminster and Wandsworth, I draw the attention of the House to the fact that the band D council tax for Wandsworth is £584, and for Westminster it is £570, compared with £1,082 for Lewisham and £1,034 for Southwark, but still they will not passport the money to fund the schools properly in their areas.

Richard Ottaway: May I draw the Secretary of State's attention to a press release from Labour-controlled Croydon council entitled "Education Secretary—Climbdown on Croydon Passporting"? It states that he accepted Croydon's proposal for the schools budget, which allowed a 90.2 per cent. level of passporting. That is an acknowledgement that he agreed to £1.7 million being taken out of the schools budget and used on social services and other things.

Charles Clarke: I have directly intimated to Croydon that I believe that it should be passporting much more than 90.2 per cent. I acknowledge the point that the hon. Gentleman makes. In my opinion, Croydon, which is Labour-controlled, as he said, should be passporting in the same way as others. However, my challenge to the Conservative party and Liberal Democrat leadership is to ask whether they are prepared to join me in saying that the money should be passported in that way.

Gillian Shephard: I thank the Secretary of State for giving way. He has spoken with disapproval about authorities that have failed to passport the full amount to schools. Would he care to comment on Norfolk, where the full amount has been passported, in addition to extra funds, by the Conservative-controlled county council? As has been mentioned, however, we are also facing 92 teacher redundancies, two of which are at the Old Buckenham high school in my constituency. Is he aware that the deadline for finalising those arrangements for redundancies is the end of this month? What can he say to reassure those teachers and the governors, parents and people of Norfolk that those redundancies will not take place?

Charles Clarke: I am happy to pay tribute to the Conservative-run Norfolk county council—I have done so on many occasions, including in the Eastern Daily Press, which I think the right hon. Lady will read—for carrying out the passporting as it has done. Moreover, to be fair to the county, when we allocated extra money to deal with the 3.2 per cent. floor, it allocated still further money. It is trying in that respect, but the question arises about the allocation of resources at the local education authority to individual schools. That has been the subject of debate.

Henry Bellingham: Will the Secretary of State give way before he moves on?

Charles Clarke: No—I wish to deal with school budgets and individual schools. I shall say again what I have said previously about passporting: the Government are absolutely committed to money being passported out to individual schools. However, in Conservative-controlled Cambridge, 3.3 per cent. less is going to individual schools than the budget; in Conservative Cheshire, the figure is 2.8 per cent.; in Conservative Kensington and Chelsea, 3.6 per cent.; and under the Liberal Democrats in their new position in Bournemouth, 2.9 per cent. I ask again whether the leaders of the other parties will commit themselves, as I do, to saying that the money that local education authorities have should be passed on to individual schools and not held simply for central services.

Joan Ruddock: I agree that the other parties have much to answer for. However, I am dealing with my local authority, Lewisham. As my right hon. Friend knows, it is a beacon authority that is working well with the Government. Unfortunately—I hope that we will get some help on this—it tells me that it needs another £3 million to stave off cuts. It has done everything that he has asked it to do, but it is unable to supply moneys from the capital budget, which is needed to keep our schools safe and open. Does he agree that there is a special case in some London boroughs?

Charles Clarke: I acknowledge the points made by my hon. Friend. I have discussed those specific issues both with her chief education officer and with chief education officers for London as a whole. It is true that there have been particular pressures in London. I believe that the way in which we should deal with the situation is through the London challenge approach that we announced the other day.

Henry Bellingham: I am glad that the Secretary of State has referred to Norfolk and recognised that it has passported as much money as it can. Has he considered the case of St. Edmund's community foundation school? Some 60 per cent. of its pupils are in special needs, it has had a £98,000 cut in its budget and the £1.6 million extra that he has allocated to Norfolk schools will give it another £4,000. A £94,000 deficit will remain and one and a half full teaching posts will be cut, as well as 100 hours of support services—25 per cent. of the total—that were going to the 60 per cent. of pupils in special needs. Surely, he can do better for North Lynn in my constituency.

Charles Clarke: I can do better for everywhere in the country, as I shall explain. I am ready to consider the Norfolk cases, like every other case, but I do not want to make this a Norfolk debate. The issue is how local authorities behave, just as the issue for the Government is how they behave.
	On local education authorities, I wish to highlight the very sharp differences between authorities in the inter-quartile range in the distribution of money between schools. The hon. Member for Buckingham and my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) mentioned Buckinghamshire. As my hon. Friend said, there is a 10.2 per cent. difference in the funding per pupil between schools at the top end and those at the bottom end in Buckinghamshire. In nearby Bedfordshire, the difference is 11 per cent., and in Cumbria, it is 10.1 per cent. Those variations are much larger than those of other authorities. Again, the point that I make to the other political parties is that they should make their position clear to their colleagues in local government. Are they for these massive differentials or against them? The great virtue of the process that we have been going through is that we have exposed all the decisions to public debate, enabling much greater local discussion of the issues in a very specific way.

Patrick McLoughlin: Will the right hon. Gentleman give way?

Charles Clarke: No; I wish to make some progress.
	That is why we have analysed extremely carefully the response of local education authorities. I thank the authorities that are distributing more money and ask them to continue the process of discussion to ensure that money gets to schools. In my Department's preliminary analysis of LEA responses, it is clear that many local authorities have taken action to manage local problems and ensure that their schools have received reasonable year-on-year increases in funding. A number of LEAs have chosen to increase their spending on schools by significantly more than the additional resources made available by central Government. Others have managed the pressures on central spending so that they increase the budgets of individual schools.
	LEAs have also confirmed that a significant proportion of the budgets that they had not allocated to individual schools by 31 March has now been allocated. For example, Bath and North-East Somerset has confirmed an additional £2.3 million; Bradford £3.6 million; and Birmingham £12.5 million. Where LEAs have indicated that they cannot yet make allocations, they have guaranteed that all the money will be received by schools during the year and confirmed that they are ensuring that all schools are notified of the sums that they can expect to receive. I think that that is a major step forward, and I thank local education authorities for it.
	However, in order to ensure that the circumstances that I have described do not adversely affect schools, I have decided that, for 2003–04 only, local education authorities and schools will be given the additional flexibility to use their devolved formula capital funding from my Department to support revenue expenditure. The decision to use a school's capital funding in that way will need to be made jointly by the school and its local education authority and should be taken only in circumstances in which failure to do so would lead to excessive instability in the school.

Patrick McLoughlin: Will the right hon. Gentleman give way?

Charles Clarke: No—I wish to turn to the specific point made by the hon. Member for Ashford about capital. First, he has a bit of nerve to complain about the use of devolved funding to schools. Before 1999, when we introduced in the system, under his Government, there was zero devolved capital funding for schools in the maintained sector. It did not even exist. We have introduced it, but he then complains. If he looks at capital more widely, he will see that the increase in capital spend in LEAs, which will pay for many of the things that he mentioned, such as special needs, started at £800 million in 1997–98 and has risen in successive years to £1.1 billion, £1.4 billion, £2.1 billion, £2.2 billion and £3 billion. In 2003–04, it will rise to £3.8 billion. That is a massive increase in capital funding for LEAs that supports the school investment that is being made. The Conservatives never went for such a policy at any time.
	I wish to make a final point about the issue of capital, to which the hon. Member for Ashford specifically referred. According to the responses that we have received, about £190 million is being allocated from revenue spending by LEAs to capital in their areas. That is a choice that they are making, but his trying to accuse us of ignoring capital or stealing from the capital pot is extraordinary when it comes from a party such as his.

David Chaytor: Does my right hon. Friend not think that it is remarkable that the shadow Secretary of State recognised the dramatic increase in capital spending that this Government have introduced, but in each year and every Budget, he voted against it?

Charles Clarke: My hon. Friend is absolutely correct. It really is incumbent on Conservative Members to think seriously about the integrity of the political positions that they take on these matters.
	As far as the current situation is concerned, I announced today that local education authorities should bear it in mind that they can commit schools to set a deficit budget, which they are likely to be able to repay over the next few years, and that with local agreement the collective balances of their schools can be used to cover the funding of such agreed deficits. In addition, as I have already told LEAs, I will be willing to give sympathetic consideration to proposals from local authorities to set aside restrictions on existing fair funding regulations and schemes, or on the conditions of grant for the standards fund, where the authority thinks that that would assist them in alleviating funding difficulties in particular schools.

Patrick McLoughlin: The Secretary of State started his speech by telling us how much extra money is going into education. Presumably, he knew that these pressures were coming on to schools when he made his decisions, so why, two months into the new financial year, has he had to make these announcements about capital repairs? Did he get his sums that wrong?

Charles Clarke: Every local authority takes decisions in setting its budget—from the level of council tax, to passporting, to the formula—in shared responsibility with ourselves. The answer to the hon. Gentleman's question is that we knew very clearly what the situation was in respect of overall funding pressures and proceeded accordingly.

Bridget Prentice: I hope that we all welcome the flexibility that will be given to head teachers as a result of my right hon. Friend's announcement. Will he comment on the possibility of a London schools challenge fund, which would help to alleviate some of the pressures in schools—even those in boroughs such as mine, where pressures remain despite the fact that we were given quite a generous settlement to begin with?

Charles Clarke: We made an announcement last Monday about the London challenge, and I am happy to tell my hon. Friend that we are considering whether there is merit in such a proposal. I made reference to that in my written answer today.

Tony Lloyd: Many schools will welcome the discretion that my right hon. Friend will build into this year's funding process. However, it makes sense for a school to move into a deficit budget this year only if it is able to anticipate funding flows for future years. Can he give some comfort to schools in that respect? Perhaps the most important thing that he can say today concerns not this year but future years.

Charles Clarke: My hon. Friend is entirely correct. I was coming to that point. My remarks have three elements: first, we must continue the process of encouraging working with LEAs to get the money out to schools; secondly, we must ensure flexibility on devolved capital; and thirdly, as my hon. Friend said, we must ensure that schools have some certainty about the funding settlement for next year, 2004–05.

Mike Hancock: rose—

Keith Simpson: rose—

Charles Clarke: I shall not give way for the moment: I want to deal with the matter in hand.
	Our key priority in securing the change for 2004–05 is to work closely with local authorities and the Local Government Association to achieve an agreed position that takes the situation forward. The critical goals are: first, to get sufficient education funding increases for every LEA; secondly, to get the right balance between support through the general grant and through ring-fenced and targeted grant; thirdly, to give schools and pupils the confidence that they will receive the money that is intended for them, which is a key element in the comments of my hon. Friend the Member for Manchester, Central (Mr. Lloyd); fourthly, to get the right balance between in-school and out-of-school provision—there are important out-of-school provision issues, for example in relation to special educational needs and pupil referral units; fifthly, to ensure that variations in the budget increases received by different schools within each LEA are appropriate and fair, which touches on my point about the inter-quartile range; and finally, to achieve our proposals on work force reform in line with the national agreement so that they can be sustained.
	My Department will work with local education authorities to improve and clarify procedures, so that all LEAs are able to distribute their funds—notably the standards fund—to schools in a timely way.

Mike Hancock: Can the Secretary of State offer some advice to the 12 schools in the city of Portsmouth that are facing budget-related redundancies, many of which do not have any significant balances? If they were to use devolved capital, they would lose the opportunity to use that capital in future, because there would be no opportunity to replace it. The local education authority has in fact passported the full 3.2 per cent. across to schools. What advice can he give to those schools and to teachers who are facing the sack?

Charles Clarke: My advice to all schools and LEAs is to work together in precisely the way that I described—using LEA resources, considering the use of devolved capital and considering any existing balances—to try to solve problems of the type that the hon. Gentleman raised. It is clear from the large number of letters that we have received that in most LEAs a very positive and constructive dialogue is taking place to address the issues directly.

Angela Browning: What advice has the Secretary of State given to LEAs, for not only this year but forthcoming years, about classroom assistants? He will be aware that many classroom assistants are in post because of the statementing of children in a particular class, and there is a statutory obligation on an LEA to honour a statement that requires a classroom assistant. Can he reassure the House that he is advising LEAs that they should honour their statutory obligations as regards classroom assistants and special educational needs pupils?

Charles Clarke: My advice to all LEAs is to obey the law, as should be the case. If the hon. Lady is asking me to do that, I am happy to do so.

Keith Simpson: The Secretary of State generously said that Norfolk county council had passported on nearly all the money, but that still leaves us a problem, and he knows it. What does he therefore say to the chairman of governors and the headmaster of Buxton primary school, who had calculated that this year they would have a surplus of £22,000, but in fact have a deficit of more than £72,000? The figures do not add up. His credibility—I say this, as a parliamentary neighbour, with some regret—has been absolutely minced locally, mainly by Labour councillors. What will he do this year, rather than planning for next year?

Charles Clarke: I take very seriously the regret expressed by the hon. Gentleman. I am weeping for it, as he will be. I am continuing to work with Norfolk county council. The issue is not the passporting percentage that he mentions: it is the money that Norfolk local education authority has and whether it has been passed on to schools directly. I am discussing that with the chief education officer and others.
	Several Opposition Members referred to the National Association of Head Teachers. Today, I received a letter from the signatories to the work load agreement asking us to act on the situation. The letter is from the NAHT, all the other teacher unions, the non-teaching unions and the employers organisation for local government, and it is signed by Graham Lane, on behalf of those organisations. It says that the joint signatories want to emphasise
	"The need to identify possible short-term remedial measures, including:
	relaxation of regulations to allow devolved capital to be transferred to revenue",
	which I announced today,
	"enabling schools to borrow from consolidated school balances",
	which I announced today, and
	"allowing local authorities to 'licence' schools to set short-term budget deficits with clear exit strategies, which will heavily depend on their confidence in the level of funding for the next two years",
	which I announced today. It goes on to ask that we encourage schools to
	"consider these options in consultation with the local authority."
	The second major measure for which the letter calls is
	"an urgent look at the impact of the next 2 years, especially Standards Fund and PRP transfers and SSG and LIG roll out. Assurances are sought that the current difficulties will not recur in 2004/05 and 2005/06."
	That is precisely the import of what I said a moment ago.
	I cite the letter because of the various quotations that the hon. Member for Ashford gave, and to give the House an assurance, which I believe and hope that most hon. Members want to hear, that we intend to work with the teacher trade unions that are signatories to the agreement and the Local Government Association to resolve the matter constructively and deal with the problem precisely as we have been asked to do. There is a long way to go. We especially need to discuss how we get a system that ensures the achievement of our goals.
	The Government, unlike the Opposition, are committed to funding schools. We could not be clearer about that, and we are determined to work together with all parts of the education system to ensure that our schools are properly funded and our children properly educated.

Phil Willis: We hope that the Secretary of State recovers from his mincing. The Liberal Democrats are grateful to the hon. Member for Ashford (Mr. Green) for choosing the subject of the debate. It clearly affects all our constituencies.
	We risk being returned to the bad old days when I was a head teacher: the Conservatives were in power and there was an annual round. It is interesting to note that, despite some valid criticism, the hon. Member for Ashford did not present an iota of an idea for a way to resolve the crisis in our schools this year. All the teachers whose letters were cited could therefore go on the redundancy list, because that, rather than dealing with the key issues, would suit Conservative Members' party political purposes.
	If we leave the Chamber without sending a clear message to schools, heads, teachers and governors that there are some solutions to the problem and that the Government are actively seeking them, we will all have failed. Our amendment called for devolved capital to be released to schools and we are grateful to the Secretary of State for picking up that point. My hon. Friend the Member for Portsmouth, South (Mr. Hancock) was right when he said that many schools will have already committed their capital. That is part of a continuing process and they will not have flexibility.
	One in four schools have balances of almost zero. There is no solution for some in either promise that the Secretary of State made. It is therefore important to find other solutions.

Graham Brady: I am sure that the hon. Gentleman would not want to give the House a misleading impression. He suggested that the position occurred every year under previous Conservative Governments. I wonder whether he agrees with the findings of Mr. John Atkins, who stated in a report that was commissioned for the National Union of Teachers this year:
	"This is unprecedented since the implementation of LMS"
	in 1990. I hope that the hon. Gentleman accepts that and apologises for the impression that he gave.

Phil Willis: I do not accept that and I do not apologise. Unlike the hon. Gentleman, I was a head teacher from 1979 to 1997. From 1988 onwards, I had to cut budgets and get rid of staff every year despite increases in my pupil numbers.

Kevin Brennan: In those years under the Tories, were not many redundancies hidden by the fact that teachers were put on temporary contracts year after year? When they lost their jobs, they were not counted as having been made redundant.

Phil Willis: Exactly the same is happening today. Tens of thousands of classroom assistants will lose their jobs this year, and they are all on temporary contracts. They are expendable. We cannot simply view our schools in terms of teachers. All members of staff are valuable in providing education.
	We must be honest and admit that 2003 was always going to be difficult. Changes to local government funding, the new schools formula, national insurance and employer pension contributions, radical changes to the teachers' main pay scale as well as the post-threshold scales, changes to the standards fund, which we largely welcome, and the introduction of work-load agreements all had an impact on devolved school budgets.
	The changes involved three major Departments: the Office of the Deputy Prime Minister, the Treasury and the Department for Education and Skills. That increased the complexity. However, it now emerges that no Secretary of State, Minister or ministerial team was in overall charge of the process, despite the three large Departments coming together. No effective modelling of the outcomes for local education authorities happened apart from an attempt by the Minister for School Standards to produce four models in June last year, all of which failed miserably. The Minister subsequently took his bat home and would not produce another model.
	No assessment was made of the impacts on individual school budgets, although we knew that they would be diverse because of the set-up. No assessment was made of the impact of the new funding arrangements on age-weighted pupil units. The more a formula approach is taken to distributing funds, the more huge discrepancies within as well as between authorities are likely to occur.

Andrew Selous: The hon. Gentleman mentioned the importance of honesty and giving clear messages in the House. I wonder whether he shares the anxiety of a chairman of resources at one of my lower schools who sent me a copy of column 558 of Hansard for 17 April 2002. The Chancellor, in his Budget speech, said that direct payments would be made to every school in the country. He stated that
	"payments to a typical primary school will rise from £33,700 last year to £39,300 this year—money that can be spent on the school's priorities, by the school and by the head teacher and the staff themselves."—[Official Report, 17 April 2002; Vol. 383, c. 588.]
	The chairman of resources of one of my lower schools said that it had received less than half that amount—

Madam Deputy Speaker: Order. That is rather a long intervention.

Phil Willis: The hon. Gentleman has made his point. I am sure that the Minister who responds will pick up the point and provide the answer, which I do not know.
	There is a lack of joined-up thinking, of which I hope the Secretary of State will take account. When things went disastrously wrong, Ministers did not go back to LEAs or schools and say what had happened. They engaged in a process of misinformation that would have embarrassed the Iraqi Information Minister. The Minister for School Standards told the Association of Teachers and Lecturers conference on 15 April that LEAs were withholding £500 million from schools, but he did not have a shred of evidence to back that up. He had not spoken to a single local authority to get the details. His statement was predicated on returns from 70 local authorities, which he made up to get out of the conference with his life.
	When the Secretary of State attended the National Association of School Teachers and Union of Women Teachers conference, at which the hon. Member for Ashford and I preceded him—[Interruption.] We went down brilliantly. The hon. Member for Ashford nods. We were a duo of great quality. However, the Secretary of State made the same assertions about the missing £500 million. He then said, to great cheers, that if he did not find the answers to his questions, he would clip wings. He has the answers, and at this point he needs to clip someone else's wings.
	An article in this morning's Yorkshire Post, which is my local paper, reported that the Secretary of State had attacked the chief officer of East Yorkshire council for being explicitly political in attacking the Government for the Budget settlement. Yet the Secretary of State went through the whole pre-local election programme on a party-political ticket, attacking local authorities for not passporting money.
	We now know from a leaked memo from the Secretary of State's office to the No. 10 office, which appeared in The Times Educational Supplement on Friday 2 May, that the Secretary of State and the Prime Minister both knew that this record investment was an illusion, yet they continued with the charade. They knew that, of the £2.7 billion that was promised to schools, £2.44 billion had already been earmarked to meet additional costs imposed on the schools by the Government. Indeed, the Secretary of State acknowledged this morning on BBC television that that was exactly the case, and that this huge sum of money did not exist. The Government knew that those LEAs with a 3.2 per cent. floor in their budgets would not be able to meet the financial pressures imposed on them. That is the level of dishonesty that lies at the heart of this debate today.

Mike Hancock: I would like to support my hon. Friend's argument. Is he aware that on 2 May, the same day that the Secretary of State published a press release condemning LEAs, his colleagues in the Department were writing to LEAs asking them to clarify their position? He was making a statement condemning them without even giving them the benefit of allowing them to state their position with regard to section 52. How on earth could it be right for the Secretary of State to make such comments when he and his Department were far from clear as to the true position?

Phil Willis: My hon. Friend makes a powerful point. We are used to such behaviour from every Minister who appears. They attack people without proper evidence, yet it is a different matter if anyone attacks the Government without evidence. [Interruption.] With respect, we have only to look at the Labour party's parliamentary briefing for this debate to see the level of misinformation that is fed to Labour Back Benchers. That is presumably why so few of them have come to support the Secretary of State today.

Parmjit Dhanda: Will the hon. Gentleman give way?

Phil Willis: I will in a minute, but I want to make a bit of progress. I am enjoying this.
	I want to make a further point to the Secretary of State and to the schools Minister. When we went through the charade of debating the Education Bill in 2002—we debated only a third of it—one crucial element that the Secretary of State insisted should go into the Bill was the setting up of school forums. Those forums were to be a mandatory device to discuss the resources coming into schools from the Department. There was to be no question of "could" or "should"—they were to be a mandatory requirement.
	What is more, according to that legislation, before local authorities could set their budgets, they had to lodge with the Secretary of State a draft budget showing how they were going to spend the money. Having got those two devices in place, the Secretary of State now has the audacity to accuse local authorities of using their budgets improperly without any evidence, having had all the evidence sent to him earlier this year in order to make those decisions.

David Wright: We have now been waiting for 13 minutes, and we have not heard a single policy proposal from the Liberal Democrats' Front Bench. Is that because the Liberal Democrats' shadow Chancellor has instructed his team not to make any further tax and spend commitments, because they would be "unrealistic"?

Phil Willis: I saw that in the Labour Members' brief as well; they trot these things out. I say to the hon. Gentleman, whose company in the House I enjoy enormously: have no worries, I shall come to that in a second.

Parmjit Dhanda: I do not have a brief in my hand, but I recall a Liberal Democrat brief in my own patch in Gloucestershire calling desperately for the changes to the funding formulae that the hon. Gentleman seems to be implying should not have come about, stating that they have added to the complications this year. The Liberal Democrats in Gloucestershire called for changes, and they got a 6.7 per cent. increase in the funding formula. After that, they said, "Well, we did not really want any changes this year. Could we have a little bit longer to think about it?" That is the Liberal Democrat brief.

Phil Willis: I am delighted that the hon. Gentleman can be so complacent that, in his schools, everybody has the budget that they require and no teachers or classroom assistants are being made redundant. If that is the case, hallelujah, I am delighted for you, brother! For many people, however, that is not the case.
	The Secretary of State challenged the hon. Member for Ashford and me to say what we would do about passporting. I am convinced—and the Secretary of State has brought no evidence to the Dispatch Box today to persuade me otherwise—that, having got in the section 52 returns and having got the letters back from the local authorities, every local authority has been able to account positively for every penny in its budget. That is the issue, rather than whether the Secretary of State should tell every local authority how to spend every penny.

Charles Clarke: Will the hon. Gentleman give way?

Phil Willis: I will just finish this point, then of course I will give way. The Secretary of State is always generous in giving way.
	The Secretary of State has his school forums, his legislation saying that schools have to lodge their budgets and his section 52 returns. He can challenge every element of those budgets. Surely that is enough for him, without having to tell every local authority how they should spend every single penny. They are accountable to their local electorate for what they do, not simply to the Secretary of State.

Charles Clarke: My point is that the local electorate should ask themselves this question. If, in Knowsley, 104.4 per cent. can be passported; in Labour St. Helen's, 120.6 per cent. can be passported; and in Sefton, 100.3 per cent. can be passported, why is it that in Liverpool only 94.9 per cent. can be passported? That is a matter for the electorate and the council in Liverpool.

Phil Willis: Of course it is a matter for the electorate in Liverpool. That is why they elect Liberal Democrats year after year, following the most decadent Labour local government ever seen in the history of local government.
	May we talk about some of the non-passporting of which the Government accuse local authorities? Let us take the issue of special educational needs. The Special Educational Needs and Disability Act 2001 put huge pressures on local authorities to fund those provisions properly, because they now have a legal duty to do so. We fought in the House for a quantifiable code of practice. Yet now, when local authorities agree, through the school forum, to use their money in that way, they are pilloried by the Secretary of State.
	Let us look at capital. Local authorities have to retain capital within the schools section of the budget for the national grid for learning and the rollout of broadband. They cannot do it any other way, yet they are pilloried for doing so. Let us look at money that has been kept back in individual schools' budgets for newly qualified teachers. How can they possibly allocate money for newly qualified teachers in April when they will not be appointed until September? How can they allocate money to a new school that is not due to open until September, or to a nursery unit that will not open until September, when the Secretary of State has transferred the money for nurseries from the standards fund through to local authorities? The Secretary of State is accusing local authorities of withdrawing money in circumstances such as these.
	Money is released from the standards fund throughout the year to finance, for instance, advanced skills teachers, national literacy strategies, behaviour improvements, training for support staff—although there will not be any—beacon school awards and summer schools. It is shameful that a Secretary of State should know so little about his own funding arrangements. Rather than attacking local authorities as he has continued to do today, the Secretary of State should congratulate them on not only carrying out the Government's wishes, not only setting up the forums, not only lodging budgets, but trying to help schools deal with the current crisis.
	Let us contrast that with what the Department is doing. Last year it failed to spend £1 billion. Can anyone imagine what would happen if that amount were allocated to local authorities and they did not spend it? No doubt their wings would be clipped, and there would be naming and shaming.
	Why did Ministers fail to anticipate this year's budget problems? There were plenty of signs that things would go wrong. Surely the whole House will unite in resisting the Secretary of State's crude attempts to threaten local authorities with taking away their powers and saying that he will manage 24,000 schools centrally. If he cannot manage his own Department, how on earth will he be able to manage 24,000 departments?
	Even today the Secretary of State claimed that since the issue had first begun to embarrass him some of the missing £500 million had arrived in schools. In fact, it was always in schools; it was being held in bank accounts, ready to be spent. It will continue to find its way into school budgets, and I am not aware—certainly the Secretary of State failed to give us an example—of a single local education authority that is changing its timetable for the distribution of allocations as a result of the right hon. Gentleman's threats and intimidation.
	The tragedy of this crisis is that while the Secretary of State tries to blame LEAs for his funding crisis, our schools, teachers and teaching assistants are paying the price. According to research by the professional associations, more than 1,000 teaching posts will be axed in the coming months; and while not all will be axed as a direct result of budget cuts, a great many will. What is more, the redundancies are not confined to a particular type of authority. We have heard about redundancies in Norfolk, but Cumbria has issued 50 redundancy notices, Northumberland 17, Leeds 43, Shropshire 20, Staffordshire 60, Kent nine, Westminster 70, Plymouth 40 and Devon 30. In Wiltshire, 53 teachers and 26 teaching assistants face redundancy. That is the human cost that the Secretary of State must face up to. This is not just a personal crisis; it is having a serious impact on the education of our children.

Adrian Flook: It is not just a question of redundancies either. Somerset LEA has described the staff reductions that schools must make, saying that according to "anecdotal evidence"
	"many schools . . . will not be filling vacancies when they arise, renewing temporary contracts when they expire and part time staff, both teachers and support staff, are having their contractual hours reduced".

Phil Willis: I think that if they were honest with themselves, Labour Members would admit that their postbags contained similar letters.
	Dame Jean Else, head of Whalley Range school—attended by the former Secretary of State—is offering to resign over a £600,000 deficit. She says
	"I am faced with having to lose some of my incredibly valuable staff and cut aspects of the curriculum".

David Chaytor: Will the hon. Gentleman give way?

Phil Willis: I will not give way any more. I have been incredibly generous.
	In a letter to the Secretary of State, following a £155,000 loss, the chair of governors at Sir James Smith community school in Camelford, Cornwall, wrote
	"The raising achievement and reducing teacher workload agenda will be completely stalled, morale and goodwill will plummet and parent confidence in the system will be adversely affected".
	Primary schools in Minver in Cornwall are tearing up their curriculum plans and timetables because heads are having to teach two or three days a week to keep the schools running.
	The deputy head of Stourfield junior school in Bournemouth has said
	"I love my job and the depression and sense of despair I have felt these last few weeks have been a real shock to me".
	His school faces a two thirds cut in its curriculum budget, and the non-replacement of all its specialist support staff. When the problems were put to the Minister for School Standards in Bournemouth during his visit to the town, he told the Daily Echo that a meeting would be "futile". We need to do something about that arrogant disregard for what people are feeling on the ground.
	It is not just a question of what is happening this year. What will happen over the next two years? The Minister thinks that the present situation is unique to the current year, but it will get worse. We will see more redundancies. Class sizes are already increasing in both primary and secondary schools. What message does that convey to those whom we are trying to recruit into teaching and teacher training? They will not want to face redundancy after just a few years. I accept that there has been significant investment in buildings and repairs, but clearly using the money this year will make a difference.
	There is a threat to the work load agreement with teachers. According to the Department, it has allocated £3 billion to implement the agreement over the next three years, yet an analysis by the National Association of Head Teachers shows that a projection of current spending trends and inflationary pressures from this year onwards will yield only £450 million. An average primary school will have £7,000 to implement the teacher work load agreement, and an average primary school only £35,000—a tenth of what the Secretary of State originally offered. There are things that we can do, and I want to be the helpful to the Secretary of State because he is generally helpful to me—or he was in the past. Releasing the devolved capital is a useful device, but many schools will not benefit from that at all.

John Bercow: Device is the word.

Phil Willis: Indeed. It is important that the Secretary of State looks at the 3.2 per cent. floor, and tries to raise it in the light of all the information that he has received from local authorities. We urge him to postpone the employer pension contribution transfer from the Treasury to the Department for Education and Skills. Clearly, the Treasury has to deal with what, in many ways, is a paper transfer but it may be the most effective way of getting £0.5 billion into the school budget this year. Will the Secretary of State use some of his reserves from the £1 billion underspend from last year to fund fully the incremental drift on the main teacher scale and the shortfalls on the post-threshold pay spines?
	This year has been a tragedy, and the script was written in the preceding two years. The Secretary of State knew what would happen, but the arrogance of his Department meant that no action was taken. Blame has been heaped on local authorities, and our schools and teachers are feeling the pain. I hope that before the Secretary of State or the Minister for School Standards achieve their aspiration to become Prime Minister they will sort this problem out.

Jonathan R Shaw: It is wrong of the hon. Member for Harrogate and Knaresborough (Mr. Willis) to accuse my right hon. Friend the Secretary of State of dishonesty. Clearly, many of us were taken by surprise by what happened in this year's educational settlement because, since the Government were elected, there have been year on year rises in both revenue and capital, resulting in more teachers and better buildings. It was reasonable of my right hon. Friend to want to speak to local education authorities, having received representations from them, Members of Parliament and schools, so that he could find out how the money has been allocated.
	I have always believed that there should be a combination of national and local funding, and that individual authorities should determine that sum. However, if my right hon. Friend is to respond to the accusations that have been made, it is reasonable that he should engage in that dialogue. Today's announcement shows that he has responded. He said that the solution that will be put in place is not a long-term measure but a short-term one. However, he has tried to find a solution to the problem instead of imposing year-on-year cuts. We heard about the problem from the hon. Member for Harrogate and Knaresborough, who was a distinguished head teacher in Yorkshire and, as a school governor in Kent and Medway, I, too, have had to deal with it.
	Every October, the county would advise us that there would be cuts next year, and to start taking account of that fact. That is what we did every year—it was the norm. That is the contrast, perhaps, between then and now. Did such debates take place then? No, because that was the norm for school spending the length and breadth of this country. The situation now is different, because there have been year on year increases. I welcome my right hon. Friend the Secretary of State's response. It shows that he wants to find solutions, and next year is obviously going to be extremely important.
	There is no doubt that the Government have made the most sustained investment in our schools for a generation. It is worth remembering where we were, and where we would certainly have remained if we still had a Conservative Government. Some might say that that would be a miracle, but it is no miracle that we have seen a transformation since 1997. Before then, our children had to use the most basic facilities, such as outside toilets. [Interruption.] The Tories may yawn, but that was the reality and all that has been abolished.

Mark Tami: Does my hon. Friend agree that there is a distinct possibility that those days could come back if we had the 20 per cent. cuts that the Conservatives promise—unless, of course, this is an area where they would not apply? Perhaps they could explain where the cuts would fall.

Jonathan R Shaw: The Conservatives have a lot of explaining to do between now and the next general election. Back then, there were not only outside toilets but leaking roofs and walls that appeared to have an aversion to paint. However, the only aversion was the Tories' aversion to investing in our schools. Such examples existed across the board.
	Members have asked about matters such as boilers and windows, but there is no doubt that we are dealing with them, and examples can be found in all our constituencies. A school that I visited recently had to wait 20 years—20 years—for a school hall. It has now got not only a school hall but a new music department and a new drama suite, thanks to £1.3 million of investment from this Labour Government. We are seeing such improvements throughout the country.
	A redundant and inadequate Victorian village school in my constituency is being replaced by a beautiful, shining new school, thanks to £1 million from the new deal. Indeed, the Tory education spokesman from Kent county council took part in the opening ceremony. [Interruption.] Oh yes. He welcomed the investment, as did the local Liberal Democrats, yet back here they voted against the windfall tax. Such things are happening all the time. We see Conservatives welcoming, and taking great pleasure in, new investments in their constituencies, as the hon. Member for Ashford (Mr. Green) undoubtedly will. Kent county council is one of 15 authorities that have just received £60 million of private finance initiative credits. Of the five schools that will benefit, two are in my constituency and one—the North school—is in that of the hon. Gentleman.
	The North school will get its share of the £60 million, and the hon. Gentleman will doubtless take great pleasure in watching the opening of the new buildings. We will surely see his beaming face in the local paper as he proudly says, "This is marvellous." But a transformation will take place as he leaves the school, gets on the M20 and heads to Westminster. Back here, the Tories vote against investment in our schools time and again. They tell their constituents that they are battling away for more resources for schools, hospitals and police, but they come back to Westminster and vote against investment time after time. When it comes to school funding, the Opposition must answer to the electorate for their actions.
	I turn now to the revenue funding measures. The announcement by my right hon. Friend the Secretary of State is very welcome, but my hon. Friend the Member for Manchester, Central (Mr. Lloyd) was right to suggest that next year will be crucial. My authority, Medway, had to dip into reserves this year. That shows the commitment of all councillors to ensure sufficient funding for schools. We were given an increase of only 3.2 per cent., but I welcomed the additional £1.3 million announced recently by my hon. Friend the Minister for School Standards. It has meant that there will be no teacher redundancies in my area, although some learning support assistant hours could be reduced. That matter has yet to be resolved, and I hope that today's announcements mean that that reduction will not happen.
	I very much welcome today's statement. The matter needs to be resolved, and I know that Ministers are determined to resolve it. The huge investments being made at present are very different from what happened in all the time that I was a school governor in Kent, when we had to make cuts every year.

David Curry: I should make it clear at the start that, if there is a Conservative briefing note on this matter, I have not read it, as the House will not be surprised to learn.
	We are discussing a matter in respect of which all hon. Members are used to the waving of bloody stumps every year. Indeed, part of what is taught at local authority training school is that bloody stumps should be waved. Sometimes that happens in response to a synthetic crisis, and sometimes in response to one that is genuine. This is a genuine crisis, and it has been made by the Government.
	The first problem is that the announcement of the Government's public expenditure figures was accompanied by a ludicrous amount of hype. The besetting sin of this Government is that they over-egg every pudding; they exaggerate what they are doing, and announce the news on several occasions. As a result of the enormous overselling, every head teacher in the country saw, like a ray of heaven above their schools, a figure of 10 or 11 per cent. in real terms written in the firmament. That was what they thought that they would get for their schools. The result, of course, is bathos.
	When it turned out that schools would not get that much, we were treated to bluster. The first set of bluster came from the Minister for Local Government and the Regions. He talked about capping local authorities that put council tax up by such a wicked amount. However, the council tax rises were introduced partly to cover education, for which spending authorisation had been increased without the necessary grant to cover it. To his great discomfort, the right hon. Gentleman discovered that half the authorities that he wanted to cap had been rated E for excellent according to the Government's own Audit Commission standards. He could not touch them, and the Government have retreated from capping. I notice now that, happily, they are also retreating from the prospect of capping next year.
	That bluster was replaced by bluster from the Secretary of State, who decided that it was all the fault of the wicked local authorities, because they were withholding funds. The heart of the problem is that two sets of formulae are being applied that are not wholly compatible. The Deputy Prime Minister and the Secretary of State for Education and skills are like two large, clumsy puppeteers getting their wires crossed as they try to present the Punch and Judy show. They blame the audience when they cannot get to the end of the performance because both of them have been knocked out.
	In the argument in Government about the distribution of funds, it is increasingly evident that a Hobbesian fight is being conducted between Departments. I do not know whether the Secretary of State is familiar with Hobbes. If he is, no doubt he will want wish to eliminate his recollections as rapidly as possible, on the ground that they are an out-of-date and arcane preoccupation.
	I want to touch on an important matter. We have been talking about passporting through education money, but local government funding is based on the principle of non-hypothecation. The Government talk about being friends with local government, and about unwinding direct grants to give local authorities more discretion. Yet, for Government after Government—and I include the Conservative Government—Education Ministers have adopted a Stalinist attitude, determined that their funding goes through, without caring a hoot whether social services or other sectors suffer in consequence. It was exactly the same with Home Secretaries: as long as police funding was satisfactory, they could not have cared less if the rest of the country collapsed in a heap. We can only wait to see whether the Department of Health will decide to join the game in respect of social services. We might as well wave goodbye to any pretence that there is genuine autonomy in local authority expenditure.

John Bercow: As usual, my right hon. Friend makes a powerful case. Does he agree that the Government have a duty to explain their double standards, whereby they are in favour of hypothecation of local government expenditure, but opposed to hypothecation at central Government level?

David Curry: My hon. Friend makes an extremely powerful point.
	What happened on this occasion? Education received a 9 per cent. increase nationally, but some capital was held back for higher and further education, so the increased allocation to local government through the revenue support grant was about 6.5 per cent. Two sorts of floors and ceilings were then applied. The first was the Deputy Prime Minister's minimum and maximum grant changes, which were intended to ensure that no one lost out in the new formula, but it was done through a process of topping and tailing. We then had a separate rule from the Department for Education and Skills that no local authority should have a formula spending share of less than 3.5 per cent. or more than 7 per cent. for education. Quite frankly, the two concepts are inconsistent and we have not seen joined-up government in respect of them.

Henry Bellingham: Is it not extraordinary to reflect that the global settlement agreed by the Treasury was not that bad? The way the Government have managed to turn a reasonable global settlement into such a shambles beggars belief. In my constituency, the budget of the Fairstead county primary school, on which I conferred an Investors in People award, is £80,000 short.

David Curry: I am grateful to my hon. Friend for providing such a powerful example of what has happened in practice and I am going to illustrate it, too. The allocation of about 9 per cent. overall, which becomes a little more than 6 per cent. through the funding formula, ends up at between 3.5 per cent. and 7 per cent. at the level of the individual school. Local authorities divvy up that amount through their fair funding formula. Generally, schools that are gaining pupils do well, and those that are losing them have to shed teachers. No one objects to that, but it is not so simple, because some schools that are doing very well also lose out. Many individual schools have been mentioned and I am going to cite one.
	Ripon college started out as an old-fashioned secondary modern school. In 1998, it had 342 pupils, but it now has 549. The percentage of pupils gaining five or more A to Cs in GCSEs has increased from 8 per cent. to 31.5 per cent. over that time. It is doing everything that the Government could want in an environment where selective education is tough for the college. Notwithstanding its achievements, it faces a budget deficit of £88,000 and has to consider making six staff redundant—15 per cent. of its teachers—closing its social inclusion unit, cancelling the literacy and summer school programme and running on a minimum capitation for departments to balance the budget. The school's advances are clearly being threatened. I have received similar letters from other schools in my constituency.
	Additionally, some schools have been dependent on the standards fund, and it is a matter of record that if a direct grant is devolved into a formula, there are bound to be winners and losers. Costs were higher than expected. The national insurance contribution increased by 10 per cent. People talk about 1 per cent., as if it were only 1 per cent. extra on the employers' bills, but it was 10 per cent. The headline rate was 1 per cent., but pensions and teachers' pay become especially onerous where teachers are clustered at the top end of the spines, which applies in many parts of the country.
	Another dislocation is resource equalisation, which takes us back to the Deputy Prime Minister. For some blocks of expenditure, the Government stopped pretending that local authorities would spend down to their notional need, and increased the spending plan without increasing the grants to cover it. That is what led to the major council tax increases, because authorisation to spend and an expectation that money will be spent is not the same as providing grant to cover it. Some local authorities have been criticised for not devolving 100 per cent. to schools—not 100 per cent. of the money that they received, but of the notional amount. They devolved only by dint of council tax increases.
	The new formula spending share is much more dependent on political interference than standard spending assessments ever were. There is much more political interference and manipulation of this formula than there was in the past. That is where the dislocations have been set up—at the heart of the Government.
	I have some seriously happy news for the Government: next year, things will get worse. The spending plans published in Command Paper 5570 show a declining rate of increase and we all know how serious the constraints on the Chancellor may be. The standards fund effect will continue as it is devolved into the formula. Furthermore, if there is council tax rebanding and local authorities with a large number of band A properties subdivide that category, they will receive lower revenues from some of those council tax payers, without compensatory increases from their relatively small volumes of high-value houses. Resource equalisation will thus have to be applied more effectively, otherwise the nearly poor will be paying for the poor through their council tax bills.
	The Secretary of State offered one formula. He said that the Department for Education and Skills might take over direct control of the allocation of money to schools. I say to the right hon. Gentleman, please do it. Make my day. I can think of nothing that would give Opposition Members greater pleasure than being able to blame the Secretary of State wholly for the funding of every school, whether it has 15 or 1,500 pupils. If he is wise, he will do what he said that he would do, but is not doing; he will give a little more trust to local authorities and apply the new localism that we all talk about ad infinitum. He will apply all the trust and partnership that he keeps talking about and trust local authorities to devolve the expenditure.

David Miliband: Will the right hon. Gentleman comment on the remarks of his hon. Friend the Member for Altrincham and Sale, West (Mr. Brady)? In a Westminster Hall debate, the hon. Gentleman said:
	"By adopting a national funding formula . . . we will create a system of school funding that is straightforward . . . and above all puts real control into the hands of . . . governors."—[Official Report, Westminster Hall, 29 April 2003; Vol. 404, c. 19WH.]

David Curry: I am against anything that would centralise power in the hands of the Government. We need to have more confidence in the people we elect locally. We need to give local democratic responsibility a try. We need to experiment with it. Perhaps we should introduce it for the first time in a long time. It is no good for the Minister to look smug—he is not doing it. In relation to local government, the Labour Government are the most centralising Government in history. There is no point in pretending otherwise. There is still a chance for the Opposition to be converted and I shall work hard to make sure of it. The Minister is lost already because the two great puppeteers are on either side of him, colliding into each other and creating enormous noise and confusion.
	That is dangerous, especially if other Ministers get in on the act. The Secretary of State for Health has been remarkably well behaved, but social services are massively underfunded at local authority level and that has a spin-off effect for schools—for example, in relation to adoption problems. We all know about the increasing pressure on local authorities to look after vulnerable children. That has an impact on education.
	Unless we have a more sensible form of joined-up government that recognises the links between all those activities, we shall not end up with a sensible formula. The two puppeteers will become three; they will blunder about like drunks circling the same lamp post. There will be a great deal of noise, a great deal of illness and no light whatever will be cast.
	The Government created the crisis. They have tried to bluster their way out, but they should look hard at functions within government and make sure that their systems are compatible, the mechanisms flow properly and the lubricant is in place. Responsibility can then be attributed to the people who ought to hold it. To attribute responsibility while in fact denying it is a dishonest form of government. I do not think that either the Minister or the Secretary of State wants that, but the current system condemns them to play that charade, and schools the length and breadth of the country are suffering as a result.

David Chaytor: I welcome the debate. The Secretary of State was right to say that he also welcomed it, because this is a serious and complex issue and it is absolutely right that the House gives it its attention.
	I am not sure that the official Opposition gave due seriousness to the issue when they opened the debate. The combination of synthetic hysteria and mind-boggling hypocrisy simply served to emphasise how peripheral the Tory party is these days to any debate about education. Following the Tories' announcement this week on the tuition fees policy, I reflected that the more unpopular they remain, the more populist they feel they must become. That is the iron rule of Conservative politics in this country. I say this to them: it will get them nowhere.

Graham Brady: Would the hon. Gentleman care to confirm that in 2001 he stood on the Labour manifesto that pledged not to introduce top-up fees?

David Chaytor: I stood for Labour in the 2001 election and the 1997 election, and I have a very clear view on top-up fees, which I have expounded many times. When we get a more detailed opportunity to discuss the hon. Gentleman's views on top-up fees, I will happily engage him in debate on that again. I may be one of the very few Labour Members who were enthusiastic about the notion of top-up fees, and I am unrelenting in my support for the concept.
	That exchange was a distraction but it is important, because it shows that whatever the Tories say today—[Interruption.] Whatever the Tories say today, no one in the education service will believe them, because, as the hon. Member for Harrogate and Knaresborough (Mr. Willis) has said, throughout his teaching career—I can vouch for this, as someone who had a small responsibility for managing the chaos of the public services during the Tory years—every year of Tory rule led to cuts in education budgets. Not only were there cuts in the size of the overall cake, but there was relentless redistribution away from those who needed it most to those who needed it least. Therefore it will be many, many years before the British people—parents, teachers and governors—forget the record of those Tory years, and whatever the Tories say on this issue cannot be taken seriously.
	I was grateful for the fact that the hon. Member for Ashford (Mr. Green) did acknowledge the significant increase in the investment that Labour Governments have put into schools during the past six years. That was a measure of his generosity, but in demonstrating his generosity he simply exposed his hypocrisy because, as I said in my intervention, if he welcomed the increase that has made possible the current level of achievements in our schools and the current increase in capital spend in our schools, why did he vote against it every year? Budget of '97: the Tories vote against. Budget of '98: the Tories vote against. Budget of '99: the Tories vote against. They have done so every year and they will carry on doing so every year.
	We all now know, because it is well documented, that the Tories' policy is to secure an overall cut of 20 per cent. in public spending. So however often they bring to the House cuttings from their local newspaper, and letters from parents and governors of their local schools, there is no way that they can justifiably criticise the Labour Government's record on investment in schools.
	The picture across the country is, of course, hugely variable. I do not deny that this is a difficult year. The Secretary of State has described in detail, as other hon. Members have, the factors that led to the current particular difficulties. Some of those factors are not altogether to be regretted. It would have been very unusual if there had not been an increase in the teachers' pension fund, given the new projections provided by the actuary.

Angela Watkinson: Will the hon. Gentleman acknowledge that the cost of staffing is the lion's share of any school's budget, and that if schools have, as the schools in Havering do, a very high proportion of long-serving, experienced teachers, that has a very significant effect? Even though Havering has passported 112 per cent. of schools funding, schools are still delivering deficit budgets because of their experienced staff.

David Chaytor: I agree completely. During the passage of the Education Reform Act 1988, I was among those who pointed out that one deficiency of the then concept of local management of schools was that schools that happened to have more experienced staff would be screwed into the ground in their individual budgets. That effect has continued since then, although it must be said that the present Government have made greater allowance for the real costs of salaries, whereas, by contrast, under the previous regime notional costs alone were taken into account.
	A high proportion of any school's budget is spent on staffing. That is important because we have to remember that, year on year since 1997, a large proportion of that significant investment has been used to raise teachers' salaries, quite apart from the one-off contribution to the teachers' pension fund this year.
	It is dishonest for any politician, local authority member or officer, head teacher or governor somehow to pretend that an improvement in teachers' pay and conditions does not directly contribute to the quality of education, first, by offering greater motivation to the work force and, secondly, by sending the right kind of signals, so that young people entering teaching know that it is a worthwhile career. We have to recognise the important contribution that has been made by enhancing teachers' salaries and improving the teachers' pension fund.
	As I was saying, the picture across the country is hugely variable. I met the chief education officer of the local authority in Bury two or three weeks ago to talk about this issue. There are variations between schools and some schools are still in deficit, but I am not aware that any school is making people redundant. However, following this year's changes to the funding formula, local authorities such as mine and many other smaller metropolitan districts, as well as unitary authorities, that have been at the bottom of the funding league table historically, are in a much healthier position.
	This year, for the first time since 1990, the local education authority in Bury has received an increase above the national average. This year, schools in Bury can see the impact of the changes in the standard spending assessment directly in their budgets. That is not to say that no school has a deficit, but schools in my constituency have carried deficit budgets every year for the past 13 years.
	The local authorities that are now squealing the loudest are often those that have made major gains under the previous SSA formula. We have to ask what they did with that money. Why was it not used to build up surpluses for when the system changed? Why did they not anticipate that the gravy train or the bandwagon of the previous SSA formula would come to a halt at some time? I do not criticise those head teachers, but I have to make the point that some local authorities in the United Kingdom have had an SSA per pupil at primary and secondary level two or three times greater than others. The schools at the bottom of the pile have been carrying deficit budgets for years and, thankfully, because of the courageous decision taken last year by the Government to reform the SSA formula, we are now getting a more level playing field.
	Examples of individual schools have been quoted, one by the hon. Member for Harrogate and Knaresborough. I regret that he did not accept my attempt to intervene earlier; I simply wanted to ask him whether I could have a copy of our brief on the debate because he seemed to be the only hon. Member who had one. He mentioned several schools, one of which is in Manchester and I know it particularly well. He claimed that that school had a £600,000 deficit. He used that example to support his argument that this was the crisis year, but, as every hon. Member knows, schools with £600,000 deficits do not acquire them in a single year. He referred to the deficit, not a shortfall, and I know that there is a deficit, not a shortfall, in that case.
	Many schools have carried deficits for a number of years, and we have to ask what have those head teachers, governors and LEAs have been doing about the deficit. Is it a matter of bad management in the school, or one of exceptional costs because of the nature of the physical structure of the school, or is it simply that the school does not have enough pupils and is operating at 50 per cent. capacity? I am not saying that any of the schools that have been quoted today fall into those categories. All that I am saying is that the enormous deficits that have been quoted are not the result of this year's changes alone—they are the result of historic factors.
	We must also recognise that if we support the system of schools having their own budgets and those budgets being determined by formula, and that formula being largely, not entirely, determined by pupil numbers—given that we have a system, particularly in secondary schools and less so in primaries, that has a built-in volatility in respect of pupil numbers, and in which parents' preferences change dramatically year on year and school intakes change dramatically year on year—it inevitably follows that school budgets will vary dramatically year on year. That is the price that we pay for an extremely open, deregulated admissions system in secondary schools. It is really no good for individual chairs of governors, head teachers or Opposition politicians to start crying that there is a crisis when a particular school does not recruit to its numbers in one given year, when it has been quietly accumulating a surplus in the years in which it was full to capacity. I simply make that point.
	There is a more profound and long-term issue that is worthy of further debate. Perhaps today is not the place to discuss the issue in great detail, but it was brought to our attention by the right hon. Member for Skipton and Ripon (Mr. Curry): the relationship between central and local government and the extent to which any central Government, in a nation of several million people, can directly influence at local level exactly what they wish to influence. The other week, the Secretary of State spoke about taking central control of school budgets. I did not think that he was referring to taking control of the management of schools, which would be unrealistic, but to the concept of whether a national formula should be distributed directly from central government to the individual school. A bigger and more serious debate is needed. The current system—some of the flaws in that system have been brought to a head this year, but they always existed in previous years, and they will always exist—is immensely unwieldy and hugely bureaucratic. It leads to enormous loss of time and energy and to arguments about who is to blame, and it does not, and cannot, enable the Government to deliver on the ground exactly the policies that they wish to deliver. We must therefore start reconsidering the whole relationship between central and local government in respect of school funding.
	Clearly, the Education Reform Act 1988 represented the critical moment at which a historic shift was made. I suspect that in the next two to four years another moment will come at which we will need to complete that historic shift. Although the right hon. Member for Skipton and Ripon mentioned social services and the way in which the Secretary of State for Health may impact on them, there is no other area of the public services in which funding to a particular institution goes directly from central Government to a local authority, is jiggled about through additional formula, and finally reaches the end of the line with everybody dissatisfied. That is the central issue. We must therefore start the debate about whether the national funding formula—let us remember that the new formula spending share system is much fairer than the previous standard spending assessment system—should be distributed straight to individual schools. I think that doing that would involve huge risks, and the only solution, as the years go by, is probably a system of distribution through regional government, although that brings something else into the argument about which the Opposition will get excited. However, given that Wales manages to distribute money straight to local authorities and schools and that we can devolve power to Scotland, why can we not devolve power to the regions of England so that they can do exactly the same job?
	The debate has raised interesting and complex issues. The Opposition have tried to manufacture a crisis, although there is not really a crisis but a series of problems that need to be resolved quickly. They have pretended that the whole country is affected, but it is not. Many parts of the country have done very nicely out of this year's settlement, although they might not have received the amount that they expected when the figures were first published. We have an immensely complex system involving a national formula that is devolved to local authorities followed by devolution to schools through a further local formula, which means that we will face such problems year on year. The time has come for a major review of the way in which we fund our schools.

Alistair Burt: I am delighted to contribute to the debate and to follow my hon. Friend the Member for Ashford (Mr. Green). He led the debate extremely ably and exposed yet another Government crisis in education. The Secretary of State can be changed, but the Government do not seem to be able to solve the problems. I am also pleased to follow my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), who made an excellent contribution.
	It is always a pleasure to follow the hon. Member for Bury, North (Mr. Chaytor). He spoke with his customary seriousness and thoughtfulness on education, although I am not sure whether his assertion that the Opposition have manufactured the crisis will be truly welcomed by teachers, governors, parents and Labour local authorities. They would attribute their problems not to Conservative Members, but to the Government. I shall speak on behalf of many people in Bedfordshire who are connected with education—parents, teachers, governors and pupils—by expressing their deep disappointment, anger and concern about the current situation, which they consider to have been a shabby business.
	There are two fundamental issues. First, the Government's miscalculation is at the heart of the crisis. The funding required to cover wage rises, superannuation rises and national insurance increases was miscalculated. No Conservative Member believes that the Government deliberately precipitated the crisis. They pulled the lever to ensure that adequate funding went through, but that patently did not work.
	Secondly, after making that miscalculation, we saw the Government make what has been their continual error: after making a mistake, they never admit to it. They make only a desperate attempt to cover it up and then blame somebody else. On this occasion, their failure to admit their error led to local authorities being blamed.
	There are two sides to the Secretary of State. [Interruption.] Well, there are many sides to quite a rounded Secretary of State, but I want to talk about his political characteristics. I saw his first side when I recently shared a television studio with him to discuss the local election results as they came in. We saw a contrite Secretary of State. He made no attempt to claim that it was a great night for Labour as the results of seats and councils lost came in from throughout the country. He was quiet and well mannered. He appreciated the scale of what had happened and presented a rather decent impression of a politician facing reality. That might well have been practice for the many nights in the next few years when he will be doing exactly the same thing.
	The second side to the Secretary of State, which is probably more familiar to most of us, is shown by his extraordinary bluster when things go wrong but he cannot possibly admit it. The Secretary of State made a desperate attempt to blame local education authorities, but when that patently failed he used a subtle change in language to suggest that perhaps it was not local authorities that were at fault for holding on to the Government money, but the schools for being so wicked over the years to have built up reserves and to have capital moneys available that they should be spending. Either way, the crisis was manufactured in the Department for Education and Skills, and it is a shabby way to treat those who have been on the wrong end of that crisis to blame them rather than to accept the blame himself.
	On Bedfordshire's specific problems, the county spends way above its standard spending assessment for education, which means that it spends more on education than the Government anticipate it should. The authority has a 100.1 per cent. passporting record, so it cannot be criticised for not doing its job properly. The problem in the county's schools was first made manifest when one or two other MPs for Bedfordshire and I recently met representatives of the local county council. We were told that some of our schools were thinking of losing teachers or were facing deficit budgets. That was quickly followed up by representations from those schools.
	I can do little better than quote extensively from a letter from the head teacher, Colin Phelps, of St. Mary's V C lower school in Stotfold, who wrote to me on 24 April. He said:
	"I am writing on behalf of Staff and Governors at St Mary's V C Lower School, Stotfold with regard to the predicament we find ourselves in concerning our budget allocation for 2003/04.
	You will be aware that this issue is causing great concern in many schools across the country, and we at St Mary's have been particularly badly hit by the increase in National Insurance and Superannuation costs . . . In early March, when we received our budget allocation, there was no real hint that things would be so bad. My first draft Budget, merely a standstill budget, revealed that we would have a deficit of £69,000, around 9 per cent. of our overall budget. This is due to staff costs representing a greater proportion of the budget than previously. Even though we are a popular school, often oversubscribed, we are having to make several cuts, making one teacher and probably two support staff redundant. Even these cuts will not allow us to set a viable budget. Any further cuts in teaching staff would mean that we could not meet the Class Size requirements or 30 Key Stage 1 classes.
	We are a school which has received national recognition for excellence in Community Education and in our educational achievements over many years, but it is difficult to see how we can retain these high standards in the light of these savage cuts. There is no doubt that children's education will suffer . . . As a Headteacher of some 14 years experience, I can affirm that things have never been so bad. It gives me little comfort to know that many schools are experiencing difficulties, and I am concerned that staff morale, already low, is going to be severely affected. The very idea that the Government proposes to lighten Heads' and Teachers' workloads by providing extra funds, is like a macabre joke at our expense. We will be stretched as never before during the next year, and probably beyond."
	Almost as soon I received those details from the head of that lower school, I received representations from an upper school. Its head told me this morning that its argument is not with the local authority, with which it has discussed the problem in depth, but with overall national funding. The school reckons that every school in the county could set a deficit budget ranging from £80,000 to £140,000. Wootton upper school has a deficit budget this year of £120,000. It could consider using grants to help it, but it does not think that it should have to go outside core funding for essential basic needs. For Wootton, staffing costs have increased by 9.7 per cent., whereas its budget has increased by only 3.2 per cent. That is the real reason for the cash crisis. It should not be dealt with by asking schools to go into reserves and the like.
	After concerns were expressed and the Government's consciousness was raised to such an extent that they became aware that there were real problems, their response was to blame local authorities, as the House well knows. They tried to fix the blame by writing a detailed letter to them on 2 May asking for their responses to a series of questions that revealed an extraordinary micro-interest in the budgets of devolved local authorities. I do not criticise the Government for that—it is important for them to know what is going on—but the exercise was designed not to gain information, but to shift the blame.
	Let me pick out three things for which my county council was blamed which it rebutted, and I am grateful for its assistance in this matter. The first charge was that the percentage increase in devolved funding for schools in Bedfordshire was less than the overall schools' budget percentage increase. The council explained that that was caused by the reduction of Government support for standards fund projects, as other hon. Members have mentioned. I am sure that by the end of the debate, the Minister will have a copy of the letter from Bedfordshire available to him, as it is easily found. The local authority states:
	"In 2002/2003 Bedfordshire's contribution to devolved Standards Funds was £5.293 million. In 2003/2004 this has reduced to £4.216 million due mainly to the LEA needing to find £1.472 million to support the continuation of Standards Fund projects for which government support has been withdrawn."
	Funding for the targeted intervention strategy, LEA school improvement and intervention and newly qualified teachers are now recorded in a different pot, and all the extra money needed is due to the Government withdrawing their previous support. The LEA goes on to say that if these sums were properly accounted for as part of the devolved funding, a 7.5 per cent. increase in devolved funding would have been shown, as opposed to the 6.6 per cent. shown by Government.
	The LEA's letter continues:
	"This would also consequently impact on the £2.9 million suggested as increased funding not devolved to schools. On the basis of the revisions referred to above this sum would reduce to £1.3 million . . . all of this expenditure can be accounted for by the increased support for children with Special Educational Needs, none of it has been retained for other purposes."
	The local authority was taken to task by the Government for spending more on special educational needs. That, the LEA tells me, was for
	"new specialist provision for children with emotional and behavioural difficulties or with autism, increased funding for statements, covering reduced recoupment income where the number of children from other LEAs attending our special schools has decreased, and picking up the increased staffing costs associated with both teacher threshold payments and the teachers' pensions schemes."
	Why should not the local authority spend its money on supporting special educational needs in that way? Do the Government think that that is wrong? If not, why did they criticise it for spending more money on such provision?

John Bercow: My hon. Friend makes a pertinent point. Is not the problem an absence of joined-up government? The Department for Education and Skills appears to disapprove of the SEN expenditure that my hon. Friend described, whereas the Under-Secretary of State for Health, the hon. Member for Tottenham (Mr. Lammy) has commended precisely such expenditure across the Floor of the House to me and to many others.

Alistair Burt: My hon. Friend makes an admirable point. The Government cannot have it all ways. They cannot pit Minister against Minister and education provision against education provision, and try to come out top on all occasions. In the present case, the problem has been caused by a miscalculation of what is needed and a desperate attempt to cover it up. That is what is so wrong. Governments do not always get it right in the allocation of resources, but the least that they can do in those circumstances is say, "Sorry, we got it wrong" and not try to blame everyone else.
	The Government also criticised my local authority in respect of unallocated devolved funding, as it is called. As the hon. Member for Harrogate and Knaresborough (Mr. Willis) made clear, the money may be unallocated, but it is certainly earmarked. All the money is already designated and is needed by schools for anticipated expenditure. It is not money available, like some form of seventh cavalry, to dig out the local authority and the schools from problems of teacher wage rises, superannuation costs and national insurance. The Government cannot have apples and pears. It is grossly unfair to criticise local authorities for unallocated funding.
	My local authority, like many others, has rebutted the charge made by Government. It would do all of us some good, and it would do the Secretary of State some good, if he showed the same degree of contrition in the House this afternoon as he did on the local television programme when he had to admit that the Labour party was losing so many seats around the country because of the Government's failure to deliver basic public services as well as people required.
	I make two points in conclusion. First, the Government should be bolder in relation to local authority control. They should give greater freedom to schools and governors, and consequently to parents and teachers, to have more control over their own budgets. Secondly, they should end their demand that everybody should bid for more and more initiatives in order to qualify for extra money. That takes time, effort and money, and schools are sick and tired and have had enough of it.
	Two issues have come together. First, there is the frustrated professionalism of teachers and those in schools who want to be left alone to get on with their job. They want the money to be given to them so that they can make the decisions about their needs. Secondly, there is a sense in Bedfordshire that schools, parents, teachers, pupils and governors are not getting a fair deal from this Government. The combination of miscalculation, failure to admit the error and blame heaped on local authorities has left a distinctly bad taste in Bedfordshire. The county, its teachers and those in schools are doing their very best. It would be appreciated if the Government could acknowledge that and make this one of the few times in their life when they say "Sorry for the mess that we have caused you."

ROYAL ASSENT

Madam Deputy Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:
	Northern Ireland Assembly (Elections and Periods of Suspension) Act 2003.

School Funding

Question again proposed, That the original words stand part of the Question.

Anne Campbell: It is a pleasure to follow the hon. Member for North-East Bedfordshire (Alistair Burt), who shares a boundary with my local education authority in Cambridgeshire. I am sure that he will be one of the first to acknowledge that, in the past, Bedfordshire has done extremely well in comparison with Cambridgeshire. On many occasions, when parents, teachers and governors in my constituency have wanted to show up the unfairness of the previous funding system, they have pointed out that in Bedfordshire, Hertfordshire and Essex, where authorities attracted the area cost adjustment, schools have sometimes been funded as much as £100 per pupil more than in Cambridge. It has been very hard to explain to parents why that is the case and why a child in Cambridgeshire has been worth so much less than a child in Bedfordshire, Hertfordshire or Essex, when we face similar costs and circumstances, so I can understand why he may well feel a little aggrieved that the huge discrepancy and unfairness are now beginning to be put right.
	Cambridgeshire has suffered for many years and is now on the road to recovery, but it is worth looking back to what happened in 1990, when we moved away from the old poll tax system and the then Government introduced standard spending assessments. At that stage, it was impossible to calculate whether an individual county council covered a high-cost area. Cambridgeshire was lumped together with Suffolk and Norfolk, which were low-cost areas, so it did not attract the area cost adjustment given to Bedfordshire, Hertfordshire and Essex. Another problem in 1990 was the fact that Conservatives controlled the county council, as they do now. Their leader, Lady Blatch, believed that it was incumbent on her to reduce spending as much as possible, as well as the poll tax, and subsequently the council tax.
	In 1990, Cambridgeshire had historically low spending. The way in which the previous formula worked meant that the area continued to suffer because of the low level that applied in 1990. I am pleased that this Government have had the courage to put that formula right. I believe that we will see a much more equal distribution of funding in future. We have started the process this year and it will continue over the next few years as the damping mechanism evens itself out.
	I was surprised to hear the right hon. Member for Skipton and Ripon (Mr. Curry), who is, sadly, no longer in his place, criticise the damping mechanism. I would have been inclined to criticise it, because the funding of my local education authority, Cambridgeshire, ended up at the ceiling because the level that it had been allocated was higher than the ceiling. Cambridgeshire has lost money this year owing to the damping mechanism. I cannot complain too loudly, however, because Cambridge city council, which is the other part of my two-stage local authority system, was funded at the floor, rather than at the ceiling. One of my local authorities is funded at the floor, and the other is funded at the ceiling.

David Chaytor: Does my hon. Friend agree that it is vital that those authorities that have been caught by the ceiling this year receive, as the years go by, the full award to which they are entitled through the new formula spending share, FSS, system, and that the campaign that has been orchestrated this year by the former beneficiaries of the standard spending assessment, SSA, system does not result in clawback and the ceiling being posited as the absolute limit of future grants?

Anne Campbell: I could not agree more. That has implications for Cambridge city council, which is at the floor. My hon. Friend will understand the dilemma that I face. I think that the money should go into education, and I concur with his view that over the next few years authorities that were funded at the ceiling this year should eventually receive their due in full.
	I have to say to my hon. Friend the Minister that Cambridgeshire did not expect to do very well out of the local government settlement. Shortly before the settlement was announced in November, the local authority decided to hold a meeting with head teachers to warn them that although they might be hoping to get a large increase in their funding this year, they should expect very little. Expectations were therefore very low. In fact, Cambridgeshire got £20 million more than it expected in the November settlement, and people were very pleased. That is a much fairer settlement for my local authority.
	I want to explain to my hon. Friend the problems that teachers face in my constituency. The average cost of a three-bedroom house in Cambridge is just over £200,000. A teacher who earns about £22,000 and has a mortgage of £150,000—that assumes that they have accumulated considerable savings—will face repayments of around £800 a month: half their take-home pay. That puts teachers in a difficult position. It also puts schools in a difficult position, in that it is hard to attract teachers to Cambridge unless they have some other form of income, such as a partner who is earning a good deal more money.
	Another problem is that a teacher earning £22,000 a year will not qualify for social housing. They will have no chance of being allocated a property from a housing association or from the local authority, because they will be deemed to be earning too much money. We face a terrible problem in my constituency, in that the sums simply do not add up. A person on a very low income probably qualifies for social housing—although they will have to wait many years to get it—and a person on a high income can afford to buy into the property market, but a considerable number of people who earn about the average level of income cannot get into the housing market either in the rented sector or in the private bought sector. I am grateful to John Barrett from the Hundred Houses housing society, with whom I had a meeting yesterday, for giving those figures to me.
	No redundancies in Cambridgeshire have been reported to me, although it is claimed that the National Union of Teachers conducted a survey in the local education authority area in Cambridge and found that there were to be 25 redundancies. The LEA challenged that and said that the figure is 17, of which seven are due to falling rolls. That leaves only 10 that are due to funding problems. I am not happy about 10 redundancies—I would not be happy about one redundancy—so I have tried to go back over the figures that the Department circulated to us. They have been extremely useful in ascertaining why my authority, which received a generous increase from the Government in November, has 10 redundancies.
	My first finding was that although the increase in the schools budget is 11.9 per cent., the amount devolved to schools has increased by only 8.5 per cent. There is thus a gap of 3.3 per cent. between the amount that the schools budget received and that devolved to schools. If I have read the tables correctly, that adds up to a considerable sum of approximately £6.1 million. That buys a lot of education, and it is difficult to understand why such a huge gap exists.
	Further on, the table shows an increase in special educational needs provision. That funding is retained centrally and not devolved to schools. I understood that schools were now receiving devolved funding for special needs. Cambridgeshire has increased its SEN funding by 52.8 per cent., which amounts to a large sum. Perhaps it goes to central pupil referral units, which badly need funding. I give Cambridgeshire its due for that. However, it begins to explain where some of the money is going.
	Cambridgeshire is also diverting a large sum from revenue to capital, so £400,000 is being spent in capital funding although it was allocated for revenue funding. Again, the Government are right to expect an explanation for that. Capital funding from the Government has not decreased but has increased enormously. It should not be necessary to divert the money from revenue to capital.
	Another large sum—£2.6 million—has gone into school contingencies. I find it difficult to explain to my constituents why the LEA would deem it necessary to have such a large amount sitting in a reserve somewhere and not being used for education when teachers are being made redundant in some parts of the county.
	My hon. Friend the Minister is right to question the schools and the local education authority about how the money has been spent, because large sums are being taken out of school budgets without any immediate and obvious explanation and spent centrally by the LEA.
	I find this debate quite extraordinary. I came into the House in 1992, when local education authority budgets were being reduced year on year. I saw cuts that really hurt in my schools in Cambridgeshire. I saw teachers being made redundant, class sizes increasing, and schools having to drop subjects that they could no longer resource. Under this Government, Cambridgeshire has seen a 60 per cent. increase in funding since 1997. That is something to be proud of, and I am astonished that the Conservatives, having presided over the previous dismal decline in funding and shown such a lack of appreciation for education, should now choose to criticise this Government, who have done so much for education.

Sydney Chapman: I am grateful to be called to make a short contribution to this debate, and it is good to follow the hon. Member for Cambridge (Mrs. Campbell). Inevitably, and understandably, when discussing an issue such as this, we look at how it affects our local authority, and I shall be no different. The London borough of Barnet has been very badly done by on any criterion that the Secretary of State might care to choose. I shall give the House the basic facts as though looking through the other end of the telescope. In round figures, Barnet received £208 million in revenue support grant last year. This year, it will receive £216 million, which is an increase of 3.5 per cent., slightly ahead of inflation as measured by the retail prices index—I do not think that is the true measurement in relation to education expenditure—which puts it in the lowest tranche of local education authority increases.
	The Department for Education and Skills has required Barnet to fund schools to the tune of £147 million this year. That means an increase of £14.5 million, but the borough has received only an additional £8.1 million to cover expenditure not only on education—which represents about half its total expenditure—but on all the other services as well. The schools have found that they need an additional 8.1 per cent. increase in funding just to stand still, never mind to make improvements. The reasons for that minimum 8.1 per cent. increase include an increase in teachers' pay, the increased employers' national insurance contributions—which will cost £1 million in Barnet—the withdrawal of some specific grants that had previously been made, and, by far the greatest item, a huge increase of £4.4 million for additional contributions to teachers' pensions.
	That is not the end of the matter, however, because the Secretary of State has changed the formula for money going to schools so that some are worse off, and some are even worse off. It has been a considerable feat for Barnet council to have been able to pass on to the schools the full £14.5 million that the Department for Education and Skills advises, even though it has received only an additional £8.1 million for all services. This analysis of the schools budgets has shown a shortfall in Barnet of some £8 million, in terms of schools setting a standstill budget.
	The result of all this—the matter has been carefully gone into, as my next-door neighbour, the hon. Member for Finchley and Golders Green (Dr. Vis), who is in the Chamber, will confirm—is that only five out of 27 secondary schools are able to set a balanced budget. The rest face deficits that, in the case of 14 of the schools, will be more than £100,000. In some cases, they will be substantially more. One of my own local secondary schools, East Barnet school, faces a deficit of £300,000. This affects the primary schools to a lesser extent because they are smaller, but they face similar difficulties to the secondary schools.
	I know that the Ministers will have received papers from the chairman of our LEA, Councillor Lynne Hillan—the cabinet member for education—giving this analysis in much fuller detail, and papers on the effects that changes in the standards fund will have on Barnet and on the accelerating cost pressures on schools. I accept that all these matters relating to the funding of education involve very complicated formulae, but I sincerely believe that the Government are hiding behind these complex arrangements rather than facing up to what they should be doing.
	School funds retained by Barnet amount to the absolute minimum. They have been retained for special educational needs and out-of-school education, about which much has already been said. I might add that when Labour and the Liberal Democrats ran the council it greatly underestimated the costs of SEN and providing for children with difficulties. That is why the costs had to increase this year.
	Barnet was one of the 19 LEAs criticised by the Secretary of State in connection with contingency funds, but they constitute less than 1 per cent. of Barnet's entire schools budget. The money is needed to finance any changes in statutory arrangements for children with special educational needs, and to cover a possible change in pupil numbers as between schools in September. The LEA has promised that any unallocated money will go straight to schools—but, which is perhaps more important, the schools have asked for the money to be retained, because they realise that certain schools could experience severe difficulties.
	One school had announced that it was to make four people redundant, but fortunately—at least in one sense—there have been four voluntary early retirements, so redundancies may not be necessary. The school, incidentally, is a primary school, not a large secondary school. Of course, there will still be fewer teachers in the coming year following the voluntary retirements.
	Barnet intends to introduce licensed deficits in an attempt to avoid staff reductions. From what the Secretary of State said earlier, I understand that it can now do that. The deficits, however, will have to be paid back somehow, at some point.
	All the evidence suggests that funding will continue to be inadequate. The Government's spending assessment makes it clear that they want Barnet LEA to make spending commitments over the next three years, but they will not reveal their likely contribution, at least at this stage. It will come as no surprise that, as a result of that and other events that I cannot discuss now, Barnet has had to increase its council tax by no less than 24 per cent. this year. It could have been 35 per cent., but Barnet has tried to reduce other services—some of them badly needed—and to make efficiency savings in the non-education sector.
	I believe that the Government are hiding behind complex distribution arrangements. They keep money back for special awards. A month does not go by without a Minister writing, "Please keep this confidential until tomorrow, but we are announcing beacon awards here or baubles there." Such awards, even if they relate to the previous financial year, should be paid upfront at the beginning of the current year so that schools know immediately how much they will receive and can plan in a sensible and co-ordinated way.
	The Secretary of State accused Barnet of holding back money that should go to schools. Barnet has brought in an independent expert, who will publish her report tomorrow. I am prepared to stand by what it says, and I hope that the Secretary of State will do the same. I hope that if he finds that Barnet is not to blame but he is, he will have the grace to apologise, and perhaps recompense Barnet for the way in which it has been treated.
	Barnet's schools, I am proud to say, have a good reputation. They are among the best-performing schools in the country. They deserve something better than the treatment they have received from the Government. There is a silver lining to this murky, thunderous cloud—head teachers, staff and the local education authority are working much more closely to try to overcome those problems. I hope that they will continue to work together to understand each other's point of view, and I hope that the Government will form part of a triumvirate that will result in a fair funding settlement.

Graham Brady: It is a pleasure to reply to the debate and follow my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman), a doughty campaigner for Barnet and its excellent schools, which are suffering badly under the Government.
	The Secretary of State began by saying that he no longer blamed local education authorities. He continued, in a murky, obscure part of his speech, to talk about problems in distributional respects and inter-quartile measures. He then went back to blaming local education authorities. He failed throughout to answer the questions put to him by my hon. Friend the Member for Ashford (Mr. Green) and to respond to his concerns about the future of the specialist schools programme and whether capital projects to provide facilities for disabled pupils would be protected. Above all, he failed at any point to apologise for his role in this sorry saga.
	We have had an interesting day. This morning, on the "Today" programme, the Secretary of State said that he expected
	"no significant redundancies amongst teachers".
	Does he not understand that a single teacher redundancy resulting from the school funding crisis is significant? One teacher losing her job is more significant than one Minister losing his. My hon. Friend the Member for Ashford said at the outset of our debate that the Minister for School Standards should consider his position. He has now had three hours to do so, and we look forward to hearing his response—[Interruption.] He says that he is off—there will be a celebration in staff rooms throughout the country at that news.
	This morning, the Secretary of State denied that he is proposing a quick fix. He may be right about that because a quick fix is the last thing that schools will be able to achieve if all their maintenance budget is used elsewhere. As Doug McAvoy of the National Union of Teachers said this morning—[Hon. Members: "Ah!"] Government Members may scoff, but it is no coincidence that the NUT now says that its relationship with the Government is the worst it has ever had with a Government. Doug McAvoy said of schools:
	"What are they supposed to do when the boiler breaks down in the winter? Sack the deputy head?"
	The Secretary of State has said that this is a difficult year with unique circumstances and has spoken of one-off pressures relating to teachers' pensions and national insurance. However, they are not one-off pressures—the tax on jobs and teachers' pensions will be there next year, the year after that, and the year after that.

Tom Harris: rose—

Graham Brady: I will give way to the hon. Gentleman, who is seeking to intervene in a debate about matters affecting schools in my constituency, only if, in Scottish questions, I can ask about schools in his constituency.
	Two weeks ago, the National Association of Head Teachers said that 78 per cent. of schools in England face a budget shortfall, and that 17 per cent. of schools have experienced a cut in cash terms in their budget. Mr. David Hart, the general secretary of the NAHT has said:
	"The Government has failed schools on a number of counts. These decisions have led to redundancies, curriculum damage and increased class sizes. This is before schools even make a start on trying to reduce workload."

Mark Francois: My hon. Friend will be aware that in counties such as Essex a major cause of our schools' suffering is the new local government grant funding arrangements. He knows that Essex had the worst settlement of any county in England. We are extremely worried that this is not a one-off year but the start of a process in which things only get worse. People in Essex want a fair deal from the Government, but they are not getting one.

Graham Brady: My hon. Friend is right. Essex is one of the authorities wrongly blamed by the Government, given that it has passed on to schools all the money that it was expected to pass on.
	David Hart went on to say:
	"This year's additional money has been completely wiped out by extra demands on budgets. We are in negative territory."
	So was Mr. Hart persuaded by what the Secretary of State had to say this morning? The NAHT said this morning that
	"we doubt very much whether the prospects of job losses, increased class sizes and shortened weeks can be staved off. Converting capital into revenue and licensing deficit budgets could help some schools but these measures, that are akin to 'rearranging the deck chairs on the Titanic', will not provide the relief that all schools in trouble desperately need now."
	We also heard this morning from the National Union of Teachers:
	"This year's quick fix is next year's major problem . . . His funding announcement represents no solution, just a refusal to acknowledge the obvious. The Government has got its sums wrong and schools are suffering as a result."
	The funding crisis is so bad that, in my constituency, the head teacher of the Bollin primary school, Mrs. Marilyn Downs, and a colleague have been pushed to the point where they are prepared even to jump out of an aircraft to raise sponsorship for their school's core budget. [Interruption.] The Minister for School Standards has caused the problem in that budget, and I wonder whether he would care to join me now in pledging to sponsor Mrs. Downs in her efforts. He can respond when he comes to the Dispatch Box, or later on.
	I should like to put this question from Mrs. Downs directly to the Minister. As she said to me:
	"Isn't it appalling when we have to keep our schools going through sponsored events like this?"
	Well, isn't it? Ministers will be judged not by what they say, but by what they do. [Interruption.] The Secretary of State says, "That's clever," but he can take no solace. His record to date in his relatively short period in office has been dismal, and the same goes for his hon. Friends.
	Will the maintenance budget for Gospel Oak school, in Camden, be sufficient to stop the cuts of £127,000 that, according to Fiona Millar, it faces
	"even if we use all of our reserves"?
	Will today's announcement make good the £600,000 shortfall at Whalley Range high school, in Manchester, which prompted Dame Jean Else to consider resignation? Will the Minister guarantee that she will not have to make a single one of her valued staff redundant?

Keith Simpson: Will my hon. Friend give way?

Graham Brady: Very briefly.

Keith Simpson: I am very grateful to my hon. Friend. I have just spoken to a reporter from the Eastern Daily Press who has been following the Secretary of State's announcement with a great deal of interest. The reporter phoned a dozen headmasters in Norfolk, all of whom were amazed and outraged at the idea that money should come from contingency funds. Much of that money is for the maintenance of buildings, to which restrictions apply because of factors such as health and safety at work. So, in fact, the Secretary of State's latest announcement has been a complete and utter disaster as far as salving his reputation is concerned.

Graham Brady: My hon. Friend makes a valuable point, and in doing so he praises what is obviously an excellent newspaper that is doing an excellent job in holding the Secretary of State to account.
	Will schools such as St. Marylebone Church of England school in London still have to ask parents for £100 donations to stave off the need for redundancies? [Interruption.] Ministers will recall that the Oratory school had to do the same thing a few years ago, although we were never told whether all the parents were prepared to put their hands in their pockets for the same purpose. Will the 92 redundancies in Norfolk that we have heard about have to go ahead?
	So what will the consequences be? How many schools will still have to sack teachers? Other schools will not replace staff who leave. Necessary maintenance will go out of the window. Schools will struggle to implement the first phase of the work load agreement, and the picture for next year looks even worse. We are still left with the grossest act of betrayal since Labour promised that its priorities would be education, education, education. As one head teacher told me,
	"They are going back on all they have promised us—withdrawing funds bit by bit whilst blinding the general public with statements that yet more money is being put into education".
	What Labour is delivering is cuts, chaos and confusion; what we are promising is a fair deal for all schools.

David Miliband: It will come as a surprise to those of my hon. Friends who have joined us recently, especially having heard the previous contribution from the hon. Member for Altrincham and Sale, West (Mr. Brady), that this has actually been quite an interesting debate. It has revolved around three issues: how much money has been distributed to local authorities, how they have distributed it to schools and how schools can be helped through this unique year of change in the local government funding system. I will address each of those issues.
	I listened carefully to the contributions of my hon. Friends the Members for Chatham and Aylesford (Jonathan Shaw), for Bury, North (Mr. Chaytor) and for Cambridge (Mrs. Campbell), and to those of the hon. Members for North-East Bedfordshire (Alistair Burt) and for Chipping Barnet (Sir Sydney Chapman). I shall focus, however, on two particular speeches. The hon. Member for Harrogate and Knaresborough (Mr. Willis) started well, but he accused me of making up figures at the Association of Teachers and Lecturers conference. He then said that I had based my remarks on a survey of 75 LEAs that showed that £250 million was still to be allocated to schools. However, by 2 May, it was clear that the amount was £533 million. The survey was very accurate. It represented half the total of LEAs, and it turned out to be true.

David Taylor: I am grateful to my hon. Friend for giving way. He mentioned 75 LEAs: 150 exist, and Leicestershire is the 150th in terms of grant per primary school pupil. It is a great shame that much of the great progress that has been made in the past six years—on infrastructure, class sizes and standards—is being imperilled by the very poor settlement that we have received. Will my hon. Friend return to last year's expenditure levels?

David Miliband: I know that my hon. Friend shares my pleasure that every LEA in the country has benefited from the increased funding made available around the country over the past six years.

Paul Marsden: I thank the Minister for giving way. What would he say to teachers in Shropshire, whose LEA has passported 107 per cent. of the funding to schools? The LEA is faced with a cash shortfall this year of £3 million, which could result in redundancies of between 20 and 100 teachers.

David Miliband: I would say to Shropshire teachers exactly what I have said to teachers elsewhere—that they must make sure that the money allocated to their LEAs is passed on to schools, and that they should make use of all the flexibilities that the Government are making available this year.
	I want to pick out the speech from the right hon. Member for Skipton and Ripon (Mr. Curry). He spoke with genuine knowledge and concern about the issues. I got lost in his metaphors involving puppeteers circling around lamp posts—or was it drunks circling around lamp posts and puppeteers getting their strings tangled? However, he made a set of serious remarks, and explained very clearly the process by which the Government allocates money to LEAs, and how they then allocate it to schools. That the right hon. Gentleman was in direct contradiction to Opposition Front-Bench policy is a fact on which I shall not dwell for the moment.
	Hon. Members of all parties raised issues on behalf of their constituents. We take those very seriously, as we do all the representations from head teachers and teachers. The hon. Member for North-East Bedfordshire was good enough to say that the Government take what he called a "micro-interest" in all schools. That is absolutely right: we are very concerned to understand what is going on at school level.
	However, it is noteworthy that, for all the talk of the letters that have been received from head teachers and teachers in their constituencies, Opposition Members, in their motion and speeches, ignored completely the improvements achieved in our schools over the past six years. Those improvements have been delivered by precisely those professionals whom they seek to defend.
	That rising achievement in our schools is now being noticed around the world. Our 10-year-olds are ahead of their counterparts in all countries, apart from the Netherlands and Sweden. Our 15-year-olds perform in the top quartile of countries in maths, English and science. More of our young people are qualifying for university with higher achievement and better qualifications.
	That rising achievement is not an accident. It is the product of deliberate choices. The number of failing schools has been halved as a product of policy. The approach to teaching in primary schools has been improved, and that is a product of policy change. Standards in our toughest areas are rising at twice the national average, thanks to the introduction of the excellence in cities programme. No choice is more significant than the raising of funds for those objectives.
	I am happy to correct what was said in a previous debate. The hon. Member for Ashford (Mr. Green) was not in charge of education policy in the No. 10 policy unit when the previous Government were in power, but it is a fact that, in that period, spending per pupil declined by more than £100 per year in real terms. It is little wonder that Britain dropped to 42nd in the world education league.
	Since 1997, that trend has been reversed. When we hear crocodile tears from Opposition Members, we must remember that they are the ones who cut our education system, and that the Labour Government have invested in it. We are increasing spending fast, and we have an expanding education system rather than a contracting one. The biggest threat to progress are the Opposition.
	This year, there will be significant increases in spending in our schools. Cash increases of about £2.7 billion represent a rise of 11.6 per cent. The Opposition say that there are increased pressures. Of course there are, and let us look at them. There are increased pressures for money, teaching staff and support staff. The money is promoting recruitment and retention in our schools. New teachers are 70 per cent. better paid, in real terms, than in 1997. We say that that is good. Experienced teachers are 22 per cent. better paid, in real terms, than in 1997. That is also good. [Interruption.] Someone mentions pensions. The teachers' pension fund has been secured at a cost to the Government of more than £500 million. Head teachers are also better paid by between 24 per cent. and 41 per cent. Of course there are extra pressures on our education system, but are the Opposition saying that we should pay our teachers less, underfund the teachers' pension scheme and deny head teachers the salary that they deserve? They will not admit it. They are certainly not saying that we should increase education funding, because they do not support even the current level of investment.

Mark Francois: On a day in which another pensions fiasco has been announced, the Minister is indeed brave to focus on that point. Of course teachers' pensions should be properly funded, but the Minister must realise that the cost falls on schools, which need extra resources to fund it. The Government are not providing the money to meet an important teachers' need. That is the issue.

David Miliband: The House will be disappointed that the hon. Gentleman has not stood up to congratulate the Government on a £610 per pupil increase in education funding, to congratulate the schools in his constituency, or to ask questions about his local authority, which has millions of pounds still to be allocated to its schools. We know that Conservative Members' compassion is skin deep and their promises empty. They complain about pressures, but will not reduce them. They are against more spending, but suggest that it is necessary. Their motion blames the new local education authority funding system, but the last one was out of date, incomplete and unfair, so it was right to reform a system that was based on the 1991 census.

Desmond Swayne: It was even worse!

Madam Deputy Speaker: Order. If the hon. Member for New Forest, West (Mr. Swayne) wishes to intervene, he knows the method that he should use.

David Miliband: I hope that the hon. Gentleman is not taking lessons from his new friends in the National Union of Teachers. I should like to present an interesting quotation:
	"The Conservatives are closer now to the NUT than they've ever been and we hope for closer co-operation in the future."
	That was said by Mr. Doug McAvoy, the general secretary of the National Union of Teachers. I would suggest that the hon. Gentleman does not follow that up.
	The reforms to local education funding were the product of widespread discussion, debate and consultation. We were asked to simplify the system and it is now based on only three factors: funding per pupil, recognition of need and recognition of additional cost. We were asked to make more effective recognition of poverty in the new system, notably for children coming from low-wage families. That is why for the first time we have built the working tax credit into the formula. We were asked to reduce the ring-fencing of grants, and we have transferred £500 of specific grant into general funding. The new system ensures that similar pupils in different parts of the country are given a similar level of funding by the Government. As my hon. Friend the Member for Cambridge pointed out, her constituency is now being funded on an equitable basis for the first time. That is the foundation of the new funding system.
	School funding is not a matter for Whitehall alone, but a joint responsibility between central and local government. We rely on that partnership, and local government has an important and legitimate role in taking decisions about local priorities, local change and school places for every child. It is for local authorities to pass money on to schools. We give them money by a simple formula and they pass it on to schools by a formula.
	On 2 May my right hon. Friend the Secretary of State made it clear that there are significant variations in the approach—not just for 19 local authorities, to which some hon. Members have referred, but for all 150 authorities listed simply in alphabetical order. The variation in the practice of local authorities makes a significant difference to the allocation of funds to schools. That is the foundation for the variation described by hon. Members today.

Desmond Swayne: How does the Minister explain the problems faced by local education authorities that have handed over all the money? That is the problem.

David Miliband: The hon. Gentleman has obviously not been listening to the debate. The simple answer is that there is a formula, which distributes money in widely different ways between schools within local education authorities. That is what explains the difference. Secondly, significant sums remain to be allocated in LEAs across the country.

Desmond Swayne: indicated dissent.

David Miliband: The hon. Gentleman shakes his head, but I can tell him that over the last three weeks, money has been delegated—and not only by North Somerset and Bath. Bradford has £3.6 million, Birmingham £12.5 million, and there is also Camden and Suffolk. All those LEAs have devolved more money.

Alistair Burt: Will the Minister give way?

David Miliband: Yes, for the last time.

Alistair Burt: I am grateful to the Minister—

David Maclean: rose in his place and claimed to move, That the Question be now put,
	Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—
	The House divided: Ayes 128, Noes 296.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
	The House divided: Ayes 263, Noes 144.

Question accordingly agreed to.
	Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House applauds the increased funding that the Government has made available to LEAs since 1997, which is up in real terms from £2,800 per pupil to £3,600 for 2003–04, with further planned increases to almost £3,800 by 2005–06; notes that the increase in funding for 2003–04, at £2.7 billion, more than covers the additional cost pressures from pay, pension and price increases; recognises that the new LEA funding formula constitutes a welcome move towards a fairer distribution between LEAs, but coupled with the changes to the Standards Fund has resulted in some turbulence in the system; endorses the action the Government has taken in response, namely to provide a further £11 million to London authorities and £28 million to authorities with the lowest overall increases; further notes that the performance pay grant for 2003–04 has been increased to meet all of schools' commitments arising from the grant provided in 2002–03, and to cover the costs of similar progress for teachers becoming eligible for performance pay in September; welcomes the decision by the great majority of LEAs to pass on in full the increase in schools funding to their schools budgets; supports the work the Government is doing with LEAs to understand the decisions they have taken in distributing their funding between central services and the individual budgets of schools; welcomes the further measures the Secretary of State is taking to provide LEAs and schools with flexibilities to avoid excessive instability within schools; and calls on the Government to consider what changes are needed for next year.

National Skills Strategy

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Woolas.]

Ivan Lewis: I am delighted to have the opportunity to consider hon. Members' views as we reach the conclusion of our consultation on the skills White Paper, which we will publish next month.
	Improving our national skills performance is at the heart of the Government's overriding mission to strengthen the country on the dual and inextricably linked foundations of social justice and economic success: strengthening social justice by giving all citizens the opportunity to fulfil their potential and know the dignity of self-improvement, and strengthening economic success because skills are a crucial lever of competitiveness and productivity. Our companies will need increasingly highly skilled workers in the competitive global marketplace. Our public services will need skilled front-line staff—managers and leaders—as they strive to offer 21st century public services.
	The Government have put in place many of the key building blocks that will strengthen our skills base in the longer term: universal nursery provision and sure start in the early years; literacy and numeracy strategies in our primary schools; secondary school reform through the key stage 3 strategy and specialist status; the framework for a new and distinct 14 to 19 phase of learning; the development of the Connexions service and education maintenance allowances that will be available nationally from September 2004; a renewed commitment to modern apprenticeships; significant reform and investment agendas for further and higher education sectors; and our skills for life crusade to tackle the scandal of the 7 million adults who cannot read or write to the level expected of an average 11-year-old. We have established the Learning and Skills Council and regional development agencies to drive forward social and economic regeneration.

Stephen Byers: I am grateful to the Minister for giving way on his point about RDAs and the Learning and Skills Council. He will know that the north-east stands to gain considerably from Ministry of Defence orders for two new aircraft carriers, but it is important that the orders provide benefits that last beyond the life of the contracts. Will he pull together the RDA and the local learning and skills council in the north-east so that they can put to him a regional skills strategy for the north-east that will ensure that we have the trained people necessary for such orders and, most importantly, that we broaden, extend and improve our skills base in the region so that we can seize the opportunities that will come from those two orders?

Ivan Lewis: I pay tribute to my right hon. Friend's work with employers and trade unions on the economic regeneration of the north-east. The issue that he raised underlines the importance of pilot projects on skills budgets involving RDAs and local learning and skills councils, which are designed to focus on regionally specific issues in the short, medium and longer term. I am delighted to give him the assurance that he wants. I shall ask the RDA and local LSCs in the north-east to produce a specific strategy to cope with the skills needs generated by the contracts.

Barry Sheerman: Before my hon. Friend leaves that point, does he think that the relationship between RDAs and local LSCs is good enough yet? The relationship is good in my own region of Yorkshire, but I hear that it is not as joined-up as we would like in other regions. It is important that there is a close relationship between those bodies if we are to achieve what my right hon. Friend the Member for Tyneside, North (Mr. Byers) asked for.

Ivan Lewis: My hon. Friend is right to be concerned about that issue, and that is why we have instituted four pilots on RDA and local LSC budgets. It is especially encouraging that even though such pilots are not being conducted formally in several regions, the good practice that is spreading means that RDAs and local LSCs in those regions are aligning their budgets more than before. There is a much more integrated and cohesive approach in each of the English regions. The pilots will move that agenda forward, but we want a far closer relationship between those two essential structures that drive both economic and social regeneration in each English region.

Mark Todd: Just to draw out my hon. Friend a little further on the role of development agencies, after substantial job losses at Rolls-Royce, an initiative was set up in the east midlands by which a taskforce engaged trade unions and others in the use of the company's resource centres. I know that he has been approached by representatives of Rolls-Royce on the model of how it tried to redeploy and reuse skills. Is he interested in that and would he like it to be pursued on a broader basis?

Ivan Lewis: Very much so. I received a delegation from Rolls-Royce positively and asked it to draw up specific proposals on how to make that model work. The days of a job for life are gone; employability for life should be our aspiration and objective now. We should increasingly pursue that policy on a region-by-region and sector-by-sector basis. We need a far more flexible approach, not a one-size-fits-all approach. I welcome that positive proposal from my hon. Friend's region.
	On the building blocks of the skills agenda, it is also important to highlight the achievements of University for Industry, which has reached nearly 800,000 learners who have taken more than 1.7 million learn direct courses. In addition, the trade union learning fund has supported 28,000 people to complete a variety of courses. That will now be supported by statutory recognition of trade union learning representatives. We have also worked closely with the Department of Trade and Industry on management and leadership, which is essential for all sectors—public, private and voluntary—to support existing leaders and to encourage and develop the leaders of the future.

Tim Boswell: As this is at least in part a consensual debate, perhaps I can assist the Minister by asking him to comment on the links between adequate levels of education and information, and good performance in the industrial relation sector. From what I have heard from industrialists, I have the strong impression that there is a much more constructive discussion with work forces that are skilled, educated and well briefed than if matters are left to megaphone diplomacy and industrial warfare.

Ivan Lewis: We seek partnership in the workplace at the beginning of the 21st century. There is no need for those old divisions to exist to undermine relationships at work. We have many models of good practice whereby good employers work with active and positive trade unionists to deliver competitive companies. That has to be a two-way relationship. Employers need to implement good practice in their relationship with their employees, and trade unions need to adopt a reasonable approach to working with management to drive forward the success of companies.
	We do not focus enough on the many positive examples of that in our economy. We want such practice to grow and improve. The skills strategy is an opportunity to improve and enhance the relationship between business and the trade unions. A clear and strong consensus is emerging on the importance of skills for both the success of British industry and the advancement and development of individuals, many of whom are trade union members.
	The results of our unprecedented investment in, and reform of, our education system are clear for all to see. We have the best ever results at 11 and 16 and the best ever teaching, as defined by Ofsted. The reading literacy of our 10-year-olds is among the best in the world and our 15-year-olds are among the best in the world at English, maths and science. Some 320,000 adults have achieved basic skills awards. Despite that progress, we are not complacent, and there remains a considerable amount to do.

Phil Willis: In the spirit of co-operation, every time the Minister or the Secretary of State speaks on the skills agenda, the further education sector is missed out. Some 90 per cent. of work in FE colleges inspected by Ofsted is satisfactory or better and 93 per cent. of work inspected by the adult learning inspectorate is classified as better. I wish that the Minister would occasionally give them due recognition for the huge success of the FE sector.

Ivan Lewis: The hon. Gentleman should be more patient. I shall come to the further education sector in due course. I am happy to pay tribute to the work of FE. The Government have recently introduced a record level of investment into the sector. We want to raise the status and value of further education and of those who work in it. I was proud to work on the "Success for All" strategy, which has been well received in the sector. Of course there are many examples of good practice in further education, but I am sure that the sector would agree that there is also room for significant improvement. It is working with the Government to achieve that. I shall say more about FE later.
	As I said, much progress has been made, but we are not complacent and there remains a great deal to do. It is essential that we bring a new cohesiveness to our approach to lifelong learning—a cross-Government strategy that will support a sustained improvement in our national skills performance. Although our economy is undoubtedly fundamentally strong, our competitiveness and productivity lag behind those of other countries. Too many individuals and employers are still being left behind.
	I should say at the outset that the strategy is not about introducing lots of new initiatives. We will make changes where they need to be made, but our priority will be to join up our policies across the skills agenda and across Government. It will be a strategy owned for the first time across Government, with unprecedented co-operation now existing between the Department for Education and Skills, the Department of Trade and Industry, the Department for Work and Pensions, the Treasury and most other Government Departments. Our shared agenda on skills will be closely linked with action on innovation, enterprise and employment, focusing on the needs of employers and individual learners. To those who, understandably, are cynical about strategies, I confirm that the strategy will also be supported by a delivery plan. We will be single-minded in prioritising sustained delivery, backed up by regular review and evaluation.
	Our objectives are clear: to develop a far better synergy between demand for and supply of skills; to ensure that the provider side is fit for its purpose, focused far more on the needs of individual learners and employers than in the past; and to stimulate demand from all customers, especially small and medium-sized enterprises and non-traditional learners. We need greater clarity in defining the respective responsibilities of the state, employers and individuals, and where finite Government resources should most appropriately be deployed.
	The White Paper will address a number of crucial issues, first, in relation to young people. There is a consensus about the importance of creating strong, high-status vocational opportunities for 14 to 19-year-olds, leading to skilled employment directly or via higher education. The Conservatives' proposals for vocational education published this week have repeated the mistakes of the past. They present vocational education as an alternative to higher education, and attempt to sort young people into sheep and goats. That is the very reason why up till now vocational education and training has always failed in England.
	The White Paper will consider employers' concerns about generic skills. We must accept that, as employers tell us, even young people leaving the education system with high-level qualifications do not have good communication, interpersonal, teamwork and problem-solving skills. The White Paper needs to address those employer concerns.
	We want to support everyday dynamic relationships between schools, colleges, universities and employers. In local communities throughout the country, those educational institutions should have daily contact with employers, and vice versa, to ensure that there is a much closer relationship between what happens in the education system and the needs of the labour market.

Valerie Davey: I draw my hon. Friend's attention to the situation in Bristol. I am sure that the same is happening throughout the country. The Department and others have a huge capital programme that is being delivered on the ground. Our local authority, and, no doubt, others, are issuing contracts on the understanding that it will be local people who get jobs, so, particularly in the building industry, where that huge capital programme is being worked out, and where the local authorities and Government Departments are involved, it is possible that young people could be brought into those jobs with the asset of the colleges, schools, Connexions and LSC, which know the needs in an area and can offer the training that those young people would need to get a job. It is a case of our contracts—

Mr. Deputy Speaker: Order.

Valerie Davey: rose—

Mr. Deputy Speaker: Order. The hon. Lady must resume her seat. I must say that I think that she needs to hone her intervention skills. That was too long for an intervention.

Ivan Lewis: Thank you, Mr. Deputy Speaker; I got the message.
	The principle of using the procurement process, particularly in the public sector, to influence the ability to employ people locally and to get employers to invest in skills is a very good one indeed. We must get the right balance between training young people for the needs of the labour market and allowing them to have transferable and flexible skills by ensuring that we do not focus on training that is too job-specific. None the less, the principle is absolutely right.
	We also need to give a strong and positive message about all progression routes and not only the conventional academic route. Every parent and commentator understands GCSEs, AS-levels and A-levels, but there is not the same understanding, passion, highlighting or focus in respect of the other ways in which young people can progress, achieve and succeed in the education system. That issue is about some of the messages that we send out; we need to be much clearer and stronger about the alternative ways in which young people can progress through the system.
	In turning to adults, I wish to focus on both employers and individuals. On employers, we face a particular challenge in getting far more small and medium-sized enterprises to invest in skills than hitherto. We need to do a number of things to facilitate that. First, we need to create a far more simple system enabling SMEs to access training. We need to achieve a genuinely "no wrong door" approach. We have looked at the principle of having one door, but, historically, every initiative that has sought to create one door has failed, so it is far more constructive to seek a "no wrong door" approach to accessing skills and training.
	We believe that it is right to make increasing use of intermediaries who work with business day to day, such as bankers, financial advisers and legal advisers, who sometimes speak in the language of business as we as politicians in the public sector cannot do. We need to use people who deal with business day to day to get the message across about the importance of skills and the best way of accessing the skills system.
	We should also be using the supply chain more. That can involve larger companies doing business with smaller companies and making it a part of their contractual arrangements that the smaller companies should invest in skills. Even some of the larger companies are now willing to help to train more people than they need so that their sector is strengthened overall. I am delighted that the director general of the CBI recently said that he believes that some of the larger companies should make much greater use of the supply chain in influencing investment in skills and training.
	In responding to my right hon. Friend the Member for Tyneside, North (Mr. Byers), I referred to the regional development agencies and learning and skills pilots, which I think will be very important. We need to respond to employers' concerns about lack of flexibility in the current qualifications framework. Employers need a much greater input in the design content and assessment of our qualifications. I am delighted to report to the House that, for the first time, the Learning and Skills Council, the Sector Skills Development Agency and the Qualifications and Curriculum Authority are working together to create a far more employer-friendly and flexible qualifications system.
	We need to build on fiscal incentives such as the employer training pilots and employer learning accounts, which are focused on small and medium-sized enterprises in particular. We are developing the sector skills council network to replace the national training organisations. In response to some of the cynicism and concern about the pace of progress on the roll-out of sector skills councils, I point out that, in the White Paper, we will publish a clear time scale for the introduction of the councils and the coverage of a vast proportion of the UK work force. We will therefore be able to respond to concern about the time involved by making it clear how the new network will roll out in the next two to three years.

David Chaytor: I was pleased to hear my hon. Friend's positive remarks about the employer training pilots. Will he tell us when they will be evaluated and whether that is likely to happen in time for publication of the skills strategy? Are we likely to see an extension of the pilots in the strategy at the end of June?

Ivan Lewis: As a consequence of the evaluation of the six initial employer training pilots, we are extending them to create another six. They will now run in a total of 12 local learning and skills council areas, providing free training and subsidies to enable employers to give their workers time off to train up to level 2. Realistically, it would be difficult to evaluate by the end of June pilots that are only just beginning. We occasionally roll out programmes before we have the evaluation evidence, but having rolled out six—now 12—we shall examine them closely to inform future policy development.

Barry Sheerman: The Minister cannot get away from the fact that there are only two. Employers are asking when they will all be up and running, because for too long they have not known what the future will be.

Ivan Lewis: My hon. Friend was sceptical about the publication of the skills strategy in June, but I have been able to confirm today that that will happen. Likewise, I can reassure him that his question will be answered in the White Paper, which will include a clear timetable for the roll-out of sector skills councils over the next two to three years. That will answer those who have raised legitimate concerns about the amount of time that it is taking. I have been very supportive of the desire of the Sector Skills Development Agency to ensure that the new councils are not merely re-badged national training organisations. If that were to happen, the initiative would be completely wasted.
	Moving on from employers to individuals, my hon. Friend the Member for Huddersfield (Mr. Sheerman) will be pleased to hear that we will announce a successor scheme to the individual learning account scheme, which will be designed to maintain the best principles that underpinned ILAs. We accept that the implementation and delivery of ILAs went terribly wrong, and we have expressed that regret on a number of occasions, but we still believe that the basic principles that underpinned ILAs then are as relevant now, and it is important that we introduce a successor scheme that maintains those principles.
	We shall develop the role of the union learning fund, which has been incredibly successful, especially in getting back learners who dropped out of education and training many years ago.
	We shall say more about an unprecedented level of investment in prison education and training. That investment has not received enough attention in this House or outside. We are putting more money into prison education and training over the next few years than has ever been put in. Almost the best crime-fighting policy that one can have is to give people basic skills, at minimum, or even higher-level skills. It is then far more likely that they will leave custody and not be part of the rotating door group who are the main reason why our prisons continue to overflow. As a society, we need to create a new approach whereby we give offenders opportunities to take a different course, and education is central to our capacity to do that.
	We need to focus on benefit recipients. Although we have the highest employment in living memory, we need to be much better at giving people who remain close to the labour market the skills that will enable them to make the final jump into work. We also need to consider the economically inactive who are almost permanently on benefit. It is difficult to imagine them going straight from benefit into work.

Linda Gilroy: Is my hon. Friend giving serious consideration to the proposal put forward by the Foyers Federation for a further education maintenance allowance for young people in foyers, especially 19 to 30-year-olds, who are caught in a trap?

Ivan Lewis: We intend to elaborate in the White Paper on our plans for a further education maintenance allowance. It is difficult to imagine that we will be able to roll that out as a national entitlement, but we need to get on with the job of introducing the principle of such allowances, with a view to their becoming permanent in due course.
	We need to be clear about the distinct and important role played in the skills strategy by adult and community learning. We need to be much clearer about its contribution, the way in which we intend to support it and how it will fit in with some of the other investment in skills, education and training. I assure hon. Members that we remain committed to the principles that underpin adult and community learning.

David Chaytor: I am pleased to hear those remarks. My hon. Friend has not yet mentioned retired people. Given the rapid increase in life expectancy, does he accept that it is important for those who are retired to develop skills to improve their quality of life?

Mr. Deputy Speaker: Order. Before the Under-Secretary replies, I remind hon. Members that we have only a limited time for the debate, which has to end at 7 pm. Since several hon. Members want to contribute, perhaps everyone would bear that in mind.

Ivan Lewis: Thank you, Mr. Deputy Speaker. I agree with my hon. Friend the Member for Bury, North (Mr. Chaytor) that the ability to continue learning and developing skills is an important element of quality of life, especially for older people. The skills White Paper, which is published next month, will reflect that.
	We need a much clearer message about the value and importance of learning to individuals. It must be about quality of life and earning potential. So many agencies are trying to promote learning that the message is often diluted by the time it reaches people, especially those who are not currently engaged in learning. We need to be much better at sending clear messages to them.
	The skills strategy will try to create a position whereby policy decisions and funding mechanisms fulfil appropriate national targets but are sufficiently flexible to allow us to respond to the needs of regions and individual sectors. One of the great challenges is ensuring clear national objectives—we are elected to provide them—and sufficient flexibility in policy and resources to enable a focus on the needs of individual sectors, regions and sub-regions. The White Paper must tackle that.
	The White Paper that we publish next month will deal with many of the fundamental issues that I have outlined. It will respond to the challenges and opportunities of the 21st century knowledge economy. We will continue our mission to enshrine a culture of lifelong learning in citizens' and employers' everyday lives. For the first time, we shall create a cohesive, cross-Government policy and financial framework to support the learning revolution that we are beginning to unleash in every community in every part of the country. I look forward to considering hon. Members' ideas and views during the debate.

Tim Boswell: Events this afternoon resembled an acted parable on the national attitude to skills development. A major and important statement on the same day as an Opposition Day debate inevitably meant that more politically salient matters have squeezed our important debate. However, I acknowledge that the Under-Secretary has spoken in a tone, reflected in the consultation document, that encourages the development of at least an understanding and consensus on a national skills strategy, and I have no objection to that. We shall consider it fairly on its merits.
	My only reservation about the concept is that my experience of Government has shown that, from time to time, Ministers put together a rag-bag of different initiatives, badge them as a strategy and try to place everything under the same heading. That does not always work without a coherent driver. However, we shall wait and see. I say in the gentlest possible terms that I hope that the Under-Secretary will acknowledge that our party's statement on higher education this week was not intended to drive a wedge between that and further education. I assure him that as he introduces proposals for his strategy, we shall have much more to say about skills and further education.
	It should be a matter of consensus that since anxiety first surfaced in the 1880s about the decline in British manufacturing pre-eminence vis-à-vis Germany and the USA, our culture has somehow turned its back on skills and—arguably more widely—on manufacturing and commerce in general. I note that the TUC, in its briefing for this debate, emphasises the need for
	"a fundamental cultural change in the skills policy framework".
	That is perfectly acceptable.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
	That, at this day's sitting, the Motion in the name of the Prime Minister may be proceeded with, though opposed, until Seven o'clock.—[Mr. Woolas.]
	Question agreed to.

National Skills Strategy

Question again proposed, That this House do now adjourn.

Tim Boswell: As I was saying, I think that that is a perfectly acceptable aim and aspiration.
	I should like to draw on my knowledge of the German dual system for a moment. I have always felt that that system was rightly admired in this country, although not so much for its pedagogical qualities, because it can in practice be rather wooden and limited. It really succeeds because it involves the active commitment of employers, their work force and its representatives, and the education system, and because a great deal of commitment is invested in it. If a similar commitment were to be mutually beneficial in British terms, as I expect and hope that it would be, and if it were to reflect genuine consent between the parties rather than coercion, I would welcome such principles being applied in this country.
	The proper role of the Government should be to set the appropriate policy framework, bearing in mind that for all the public spend on education and training post-16, the private sector contributes two or three times as much—depending on some definitions that are rather difficult to determine. There is a huge commitment from private employers, as well as a huge investment of employee time. Unfortunately, in their initiatives in this area to date, the present Government have made some significant blunders. Indeed, the Minister admitted to one today, in the form of the individual learning accounts, which were described by the ombudsman as amounting to gross maladministration and reported by the Public Accounts Committee to have involved a loss of nearly £100 million.
	I welcome the fact that Ministers have confirmed their intention of introducing "son of ILA" in their skills strategy next month. I also welcome the fact that they have said that small training providers will not be excluded. There is a real danger that we might move from failure to an excess of bureaucracy and control in this area, and therefore stifle any new scheme. I hope that there will be a more rounded approach this time, and a more successful one.
	Individual learning accounts are not the only thing that Ministers have got wrong. As the Chairman of the Select Committee, the hon. Member for Huddersfield (Mr. Sheerman), has already acknowledged, there has been a hiatus in the establishment of sector skills councils. I could never quite understand why the national training organisations were abolished before the new bodies were up and ready; that has created a good deal of uncertainty. There have also been concerns about the development of modern apprenticeships, although I appreciate that the figures are expressed in a number of ways and that that might partly reflect statistically the fact that people can no longer do a foundation course as part of an advanced modern apprenticeship, then come off such a programme and get credit for it. The record on A-levels has not been very good, either, in terms of delivery, and there are continuing problems with the sagging of vocational A-levels in terms of their attractiveness to students.
	Ministers' record in this area has been at the very best—I speak in measured terms—patchy. But we shall stand back from that on the basis of trying to consult on the matter. Perhaps more basically, we need to ask why we need a skills strategy. I attended a recent conference on this issue, under the broad sponsorship of the Learning and Skills Council, and I was particularly struck by the message delivered by Vic Seddon, the executive director of the London South learning and skills council. He has a wealth of experience in further education. In what he admitted was a personal comment, which I found very striking, he said:
	"Never confuse the absence of qualifications with an absence of skill, nor the converse."
	He went on to say:
	"Not every profession nor skilled trade requires graduate education."
	I think that those are both perfectly reasonable comments. He went on to document some interesting statistics, which confirmed my impression that, while the United Kingdom compares favourably with its European competitors in terms of participation at graduate level, it is in the crucial level 3 and level 2 skills that the disparities are least favourable to us. That is where there is a real national skills gap.
	As an officer of the all-party group, I am lucky enough to receive briefing from the Aluminium Federation. Only this morning I was sent some papers expressing the view from the sharp end. They refer to the falling number of students willing and able to read for degrees in material sciences and engineering, and report that whereas typically at the department of material science at Cambridge there have been 30 graduates per annum, this year there are nine, and of those not one is going into the United Kingdom manufacturing industry.
	The federation's second major concern relates to the lack of craft technicians able to operate such equipment as rolling mills and extrusion presses, and shortages of people with skills in, for instance, welding, plumbing and maintenance. It concludes that the aluminium industry
	"does not believe that a target of 50 per cent. of all school-leavers undertaking a university degree of sufficiently high academic standing is either feasible or sustainable."
	It adds
	"We believe that far more effort should be put into skills training at a lower technical level".
	In fairness to the federation, I had better not report its views on top-up fees, lest the House imagine that I drafted them myself. There was, in fact, a close coincidence between those views and the Conservative view.

Phil Willis: I realise that the hon. Gentleman is obliquely trying to justify the policy statements that he made earlier this week, but the big problem for all of us here is how to divide students into the right progressions, as it were, at an early stage. Does the hon. Gentleman think the skills document contains any attempt to lead us in that direction, encouraging us not to think in terms of sheep and goats but to keep an open mind when it comes to the progress of young people after the age of 14?

Tim Boswell: In this instance, I think the hon. Gentleman has made an interesting and important point. Having, to an extent, experienced such treatment myself, I think it regrettable that young people should be forced to make choices affecting their long-term careers—although they are presented as academic choices—at an exceptionally early age. Whatever emerges from the strategy, it could be said that the test the Minister is setting up for it is the degree of flexibility it will involve, and the extent to which policy involving areas of weakness can be embellished or reinforced.
	Conservative Members believe that the Government's pursuit of a 50 per cent. target for higher education—which has, as far as I know, no objective basis or justification—has distorted their efforts. It does not match the actual requirements of the economy, it will not bring about the right skills mix, and it is very derogatory of the 50 per cent. of young people to whom the target does not apply. We genuinely hope that as many as possible will participate in appropriate education and training after reaching the age of 16. Of course, we also hope that they will proceed to higher education in due course if they show that they can do it.

David Chaytor: It is interesting that the Conservative party's education policy is now influenced by the aluminium industry. That is surely a first in British politics.
	Why should there necessarily be a conflict between the objective of securing more graduates and the objective of increasing the number of level 3 qualifications? Why should the two be mutually exclusive?

Tim Boswell: I did not intend to say that, and I do not think the hon. Gentleman should caricature what I said. My point was that the Aluminium Federation's submission happened to coincide with, and in my view expressed rather well from an independent source, much of our own thinking.
	I hope that we all want greater participation among the post-16s. What divides us is resourcing to some extent, and also what constitute the right pathways for individuals.

Andrew Love: From the hon. Gentleman's response to my hon. Friend the Member for Bury, North (Mr. Chaytor), can we assume that if the Conservatives' policy is to restrict the number of graduates, there will be additional investment in intermediate and vocational skills training?

Tim Boswell: The hon. Gentleman must not anticipate what we will publish, but we have a strong interest in making sure that there is sufficient investment in that area, and have a reasonable record in securing it in the past.
	The first prerequisite of a skills strategy is the active involvement of employers as well as unions. The Government have introduced some union-oriented initiatives and the hon. Gentlemen will know from our debates on statutory rights for employees who are also trade union learning representatives that I always pay appropriate tribute to the work of unions in this area, but it is also important to involve employers. Interestingly, a written answer of 30 April to my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on Connexions partnerships, to which the Minister has already referred, said that only 15 of those partnerships had two or more employer representatives. Twenty-six had one representative and six had no employer representatives on their board. That pattern is broadly reproduced in other local learning and skills organisations. It is essential that employers have some ownership in this process, and I agree very much with Dr. Ken Boston of the Qualifications and Curriculum Authority that employers should have a stronger hands-on involvement in developing the right portfolio of qualifications.
	On marketing the skills agenda, it is not just the credibility of qualifications among employers that is important but their acceptability to young people and employees. If there is not a consensus among students that qualifications are worthwhile or do-able, they will fail. They need to be interesting, manageable and flexible, but not at the expense of rigour. No one in the House would want to sign off a lot of second-rate vocational qualifications—I certainly do not. The qualification framework must be coherent. Mr. Seddon, whom I have previously mentioned, spoke about 40,000 qualifications and said rather briskly, "Too many." I have some sympathy with his remark.
	The right framework for credit accumulation and transfer is critical to secure progression and coherence, not just upon young people's first leaving school but in their future career as well. All of that must be properly funded. The Association of Colleges has expressed concern that, despite the apparently large increases in college funding, after various things are deducted, there are functional shortfalls. We debated that in Westminster Hall only yesterday, and I do not intend to return to the subject at length. However, I wish to make particular reference to the association's concerns about cuts affecting adults who are taking A-levels and level 3 qualifications, both in vocational and academic subjects. I am afraid that, if I did not tell the Minister so, I did tell his predecessor, the hon. Member for Croydon, North (Malcolm Wicks). When we were discussing the Learning and Skills Act 2000, I said that increased emphasis on education for 16 to 19-year-olds has tended to displace adult provision, yet many skills problems centre on that provision. I worry that over-dependence on the foundation degree to expand numbers and trigger increases in college funding would result in a reduced number or the elimination of higher national diplomas and certificates.
	Finally, a skills strategy requires an effective means of delivery. I am pleased that the Minister was prompted to refer to further education, because many of us believe that it is central to achieving a skills strategy. Vocational higher education is of course important, and much of this will be delivered in FE colleges. In any case, it is worth the House's considering whether a medical or a legal degree is not at least in part vocational, as well. So, of course, is straight workplace learning, and there is nothing whatever wrong with that. But in my view, colleges play a central role and can offer something to almost all students or learners. They deserve our active support and encouragement, and that will be a test of the coming strategy.
	I shall close shortly and leave the path open, in this truncated debate, to at least some further contributions, in addition to those from Front Benchers. Before I do so, I should like to mention two more general educational points. First, above all we should not forget, in adult learners week—I am pleased that the Minister referred to this—that there is no absolute distinction between what I shall call "useful" and "useless" learning for shorthand. All learning is valuable in itself, and it is a good thing that people embark on it. Those who embark on the one may well end up on the other, and both have their own place. At the moment, there is definitely a run-back in participation in adult education, but I leave it for others to say whether that is directly or indirectly related to the situation that I reported in terms of vocational A-levels. Figures given to me just a few moments ago suggest a reported decline of 10,000 in adult learner participation. The system and the strategy must be robust enough—this will be a test of the Minister's bona fides—to ensure some continuity for adult and community learning. I hope—perhaps I may say that I expect—that Ministers will take the National Institute of Adult Continuing Education submission seriously on this matter.
	Secondly, we all need to work together to re-emphasise the moral, as well as the material, work of skills. Of course, pay helps, and the rates available to plumbers in London, for example, indicate a real service need: they are needed and they get paid. However, there are others with high-level skills who do not perhaps get paid as much as they deserve, although that is difficult to prove in the market system.
	What is missing from our debates and our approach to the skills agenda is a recognition of the need for quite proper celebration of good technical and vocational education, and of a high level of skills—regardless of whether they have been acquired through a formal process. Conservatives, at least, want a fair deal for every man and woman. We want no employee to be left out, and no employer to be a non-participant. Quite a lot of the people whom I have worked with in my life have been able to bring remarkable skills—skills that I may not have had—to bear on practical problems. I recall vividly from earlier stages in my career the impact in my own constituency of people with varied skills, such as agricultural fitters and Coventry toolmakers. They had a huge influence, and they deserve a great deal of respect. We can perhaps all agree that pride in the job needs to matter again. We need to encourage that to happen, and to celebrate it properly where it does.

Linda Gilroy: In his opening comments, the Minister said that through access to learning we need to achieve both social justice and economic success, and that it should ensure that all citizens have an equal opportunity to obtain a minimum foundation of learning for their future employability. Nowhere is that more true than in my constituency, where adjustments to a decline in traditional industries in the defence sector have led to very high levels of unemployment. However, there has been a dramatic change in that regard. Developing the skills sector through further education, the Learning and Skills Council and the regional development agencies is playing a very important part.
	The debate is important. As my hon. Friend outlined, the Government have already done much to identify the key issues, and the roles that individuals, Government and employers must play. I especially welcome the progress report on the Developing National Skills Strategy and Delivery Plan, which outlines just how much has been achieved.
	I know that many other hon. Members want to contribute to the debate, so I shall speak for only a few minutes. I want to touch on two areas—the role of the unions, and issues relating to basic skills. My hon. Friend the Minister responded to an intervention by the hon. Member for Daventry (Mr. Boswell) by saying that there were opportunities to build the relationship with trade unions, and that perhaps we had not focused enough on what could be done in that respect. The skills strategy progress report to which I referred earlier makes a brief mention of trade union learning representatives and of the pilot schemes that have been carried out. However, the south-west TUC has given me information as to the extent to which those measures are making a contribution, and the results are really quite impressive.
	In my constituency, the union learning service, through the south-west TUC, has trained learning reps in the Land Registry, the Ministry of Defence, and the Inland Revenue, and firms such as DML and Toshiba. An interesting item in the progress report concerned ISS, Mediclean and the Derriford national health service trust. After an initial foray into the area in the computer course called "Keep up with Your Kids", three more GMB learning reps have been trained—one in Mediclean and two in the trust. Courses in basic skills and IT communications are now being planned by the GMB for trust employees later in the year. Those courses will raise skills and confidence, and it will make people aware of the potential for raising skills in a part of the NHS work force that is often overlooked.
	I could list many other items, but time does not permit. However, I want to turn to the TUC submission in respect of developing the skills strategy, which refers to the important intermediary role played by union learning reps in encouraging employees to engage in learning. That is partly acknowledged in the skills strategy document, but a great deal more could be done. I urge my hon. Friend the Minister to look at the scope for specific measures to develop a partnership between Government, employers and unions, at all levels, to implement and drive forward the national skills strategy.
	I hope that my hon. Friend the Minister will look at the continental experience. For example, 63 per cent. of German workers have intermediate qualifications, compared to 28 per cent. of workers in this country. Clearly, that lends support to the Government's strategy to improve the quality of what is called the "vocational offer", and to expand its take-up. However, we need to recognise that the skills gap with countries such as Germany will not be tackled unless we take account of the social partnership model that exists in those countries. The recent Budget speech by my right hon. Friend the Chancellor of the Exchequer hinted at the need to emulate that approach, when he said:
	"Moving beyond the old voluntarism of the past in this national effort for skills, everyone—government, employers, employees trades unions—has a responsibility and a part to play"—[Official Report, 9 April 2003; Vol. 403, c. 282.]
	I want to touch briefly on the basic skills agenda. In Plymouth, it is incredibly important, where between 38,000 and 40,000 people lack the literacy and numeracy skills needed for even the most basic contribution in the work force. It is very important that something is done about that, and that it becomes a priority target for funds. I hope that the basic skills agency will be given sufficient funding to build on the important work that it is doing through the gremlin advertising programme that it is running. The agency gave important support to one of my constituents, Sue Torr, and her Shout It Out project. Sue has had dyslexia, but has written a play and presented it to people in the south-west and across the UK, as well as in Paris, Japan, Thailand and Africa, through UNESCO. Sue is currently seeking business backing through Co-Active in Plymouth, and I hope to be able to arrange a meeting with the Minister in a few months' time to talk more about the project.
	I shall conclude my remarks on that point in order to allow others to take part in the debate.

Phil Willis: I congratulate the Minister on arranging the debate and I am only sorry that we will not have longer to concentrate on it. He has brought a real passion and commitment to his brief, and he has won much credit for engaging the House in the progress of the national skills strategy, especially from all the organisations with an investment in it. I say that to the Minister in a spirit of co-operation.
	I am sorry that the Economic Secretary is about to leave the Chamber, because he took much unfair criticism over the individual learning account issue. While the Government handled the preparation of ILAs appallingly, the principle was right. For the Government simply to abandon the concept would be wrong, and I pay tribute to the Economic Secretary for the way in which he took the flak so politely on behalf of the Government.
	We had an interesting debate earlier on education and schools funding, and this debate is not unconnected. The Minister began by talking about the way in which the Government have approached the crucial 14 to 19-year-old agenda, and he is right that schools are the bedrock of a skills agenda for later life. We need to leave behind the idea that education happens in one place and skills training happens somewhere else. One of the central strategies of the policy for schools is that every 14 to 16-year-old—irrespective of academic ability—should have the opportunity to spend one or two days on vocational courses in a further education college or with a training provider.
	If youngsters choose to study vocational courses off a school site, in an FE college or with an employer—and I hope that many do—the issue of funding transfers increases in importance. Once school budgets are constrained—as at present, for whatever reason—head teachers are reluctant to invest resources in such transfers. As a former practitioner, I can confirm that that is an issue that the Minister must address. One particular problem is transport costs for youngsters moving from site to site, because it is not desirable for those costs to fall on the school directly or on the individuals. Unless we can increase what is offered to young people aged 14 or over in schools and colleges, we will continue to go down separate roads. I know from my constituency experience how difficult it is to get parents out of the mindset that their children go to school and then automatically on to university.
	The Liberal Democrats have championed the importance of the schools agenda and we have been at pains to point that out to the Minister. We recognise the huge challenge that the Government face in getting the national skills strategy right. Last month, the Secretary of State for Education and Skills introduced the skills agenda as part of the Budget debate, and I set out a Liberal Democrat critique of the progress report. Today, I wish to build on those comments and describe what the Government must do to bridge the gap between the thinking set out in the progress report and the action that must be outlined in the national skills strategy in June. Given that the Government—especially the DES—are so fond of tests, I decided to set them some, and thought that five would be the right number.
	The first test is to create a national education and skills strategy, rather than a stand-alone skills strategy. I accept that the focus on skills has added sharpness to the overall debate, but there is still a danger that the Government will create a new rigid, horizontal silo, comprising the vocational element for 14 to 16-year-olds, 16 to 19-year-olds, FE, higher education and adult learning, without bringing any of those aspects together. Such a system would prevent individuals from moving from the vocational into the academic route. We need to create a scaffold rather than separate ladders, otherwise we shall perpetuate the education and skills divide instead of breaking it down. Integration is the key.
	The foundation of an integrated education and skills system is a qualifications framework—a point emphasised by the Minister in his opening remarks. However, such a framework must facilitate movement between academic and vocational pathways. At present, we do not have that. We nearly achieved it with the GNVQ system, which was working well. However, if that system is to be abandoned we need a new framework to replace it.
	The Liberal Democrats want a unit-based credit accumulation system as part and parcel of the framework, which would allow education and skills training to be broken down into small units, thus enabling the two to be brought together. The creation of a national education and skills strategy should be based on an understanding of the strategic role of further education colleges. We all try constantly to emphasise that point. However, if colleges are to fulfil their role, their funding and their mission must be secure. When I talk to the Association of Colleges and to the principals of individual colleges, it worries me that they seem to be being squeezed out. The Learning and Skills Council will not talk to them about growth and expansion, and there is a genuine fear in colleges that, unless they produce courses that form part of the national skills strategy programme, they will not receive funding and will have to take a separate road and charge full fees for the courses that they offer. That is a genuine worry in colleges and for people who are interested in adult education more generally.
	The second test for the Government is to develop clear progression routes for individuals. The national skills strategy will need to explain how young people with different types of level 3 qualification can progress to higher education. To be blunt, the DES ministerial team seem divided. The Secretary of State and the Minister for Lifelong Learning and Higher Education seem most fond of a progression route that involves increased achievement at GCSE, with five-plus subjects at that level, increased achievement of two A-levels, and then straight to university. That is a very traditional model.
	The higher education White Paper, however, states that future HE expansion will take the form of foundation degrees rather than honours degrees. We support the Government in that vision—as, I think, do the Conservative Opposition. However, that gives rise to the question: why should bright 17-year-olds who stay on at school to gain two A-levels opt for a foundation degree rather than an honours degree? That is a skills mismatch if ever I saw one.
	By contrast, the Minister who opened the debate believes that young people with advanced modern apprenticeships should be able to progress to a foundation degree. I support him in that aspiration. We should pursue it. However, the key question is whether such study should be full or part-time. I shall ask the hon. Gentleman the same question that I put to the Secretary of State during the Budget debate: does he really think that an apprentice who has a job and a career will swap them for an income-contingent loan for living costs, and perhaps tuition fees, to study for a full-time foundation degree? The answer is that people will not do that. The vast majority of foundation degrees will be studied part-time. We must encourage people to combine their full-time job with a part-time foundation degree. That is the route forward.
	The big black hole in the HE White Paper, as the Secretary of State has now conceded to the National Institute of Adult Continuing Education, is the issue of part-time higher education. I put it to the Minister that it cannot be right that part-time higher education students are charged upfront market-based fees when the Government are introducing a system of deferred, regulated fees for higher education students. Part-time higher education might be an irrelevance to the higher education White Paper, but it cannot be to the national skills strategy. We are not talking here purely about low-level skills.
	The third test is the introduction of a fairly coherent system of financial support for adults in higher and further education. We have made it quite clear that we believe in free tuition for all adults wishing to achieve a "first" level 2, a "first" level 3 or a "first" level 4 qualification. That means abolishing fees for part-time and full-time HE students and for part-time and full-time foundation degrees.
	The Liberal Democrats have been at the front of the campaign to abolish tuition fees, and although we welcome the Tory U-turn this week, I suspect that the Tories' conversion is more to do with vote catching than principle. [Interruption.] I am glad that that raised a response.
	We welcome the proposals in the progress report for free "tuition and training" for adults of working age without a "first" level 2, but we expect the Government to assist all adults to achieve a "first" level 2 qualification. The Campaign for Learning has pointed out that in percentage terms the largest group who do not hold a "first" level 2 are economically inactive. Of the 8 million who were recorded as economically inactive in 2002, 4 million did not have a level 2 qualification.
	However, tuition and training costs are only part of the financial barriers faced by young and mature adults wishing to enter HE and FE. There is also the question of support for living, study and travel costs, and it cannot be right for the Government to spend in excess of £2 billion a year on the living costs for full-time undergraduates but barely a tenth of that for adults wishing to study part-time in FE. The time has come for a comprehensive system of living cost support for full-time students wherever they are and for part-time students wherever they are, and we trust that the level of support will be the same as that for full-time HE students.
	The time has also come for a comprehensive system of financial support for both FE and HE part-time students, and I hope that the Minister will confirm that education maintenance allowances will be extended to part-time adult students in FE, and say whether he will consider such a scheme for part-time students in HE also, because the education maintenance allowances may well be the basis for cracking this very difficult problem.
	The Minister has repeatedly told the House that the national skills strategy will be truly Governmentwide, so this is our fourth test, although I am tempted to say that the DES must make a better job of joining itself up before turning on the rest of Whitehall. The progress report does not inspire confidence. I see only limited links with the Department of Health—and the national health service, even though that is the largest employer in Europe. It is astonishing that the Office of the Deputy Prime Minister is completely omitted from the progress report. Local authorities are often the largest employers in local communities. They, too, have skill needs to deliver world-class services. The progress report also states that one of the key drivers of skills development is physical investment, yet the progress report contains no links to the housing agenda or the regeneration agenda.
	We had been led to believe that two Departments would feature highly in the national skills strategy: the Department for Work and Pensions and the Department of Trade and Industry, yet the former has no input in the progress report, although this week the Minister for Work signed an accord between Jobcentre Plus and the Local Government Association to join up welfare-to-work and regeneration policy. Again the Learning and Skills Council and the national skills strategy feature nowhere.
	With regard to the Department of Trade and Industry, the progress report is half-hearted. It rightly makes the link between the DTI's innovation and business support responsibility and the national skills strategy, but innovation and business support are only a tiny part of the DTI's responsibility. It also has responsibility for employment rights, yet the progress report says nothing about the national minimum wage and employer training and it shies away from the issue of collective rights over training.
	The TUC points out in its response to the progress report that there is no reference to the DTI review in the Employment Relations Act 1999 or to whether training should be placed on the bargaining agenda alongside hours, holidays and pay. I understand that the Government have ruled out placing training on the bargaining agenda, but the national skills strategy will need to offer a full and frank explanation of why.
	The last test for the Government is to clarify where they stand on the statutory intervention in skills. At the progress report's launch, the chief economic adviser to the Treasury said that Government policy was
	"moving to a post-voluntary approach to skills training."
	Two weeks later, in his Budget speech, although not in the Budget report, the Chancellor said:
	"Because nobody wishes Britain to compete on the basis of low pay but on high skills, the right to education to 16 must be complemented by the right to lifelong learning".—[Official Report, 9 April 2003; Vol. 403, c. 282.]
	Those two phrases, not the rest of the progress report, have captured the attention of the CBI and the TUC. What do they mean? Is the Financial Times accurate in its assessment that a statutory right to time off for training will be a key Government proposal? If so, we will support the Government on that proposal, because such intervention is needed to make all this a reality.
	Those are the five tests that we would like to be addressed. We believe that the Government have made an admirable start in producing a national strategy, and we wish the Minister good fortune in June, when he introduces the final report.

Barry Sheerman: I shall be very brief. I often follow the hon. Member for Harrogate and Knaresborough (Mr. Willis) in debates, and he never is, but I shall take five minutes at the most. I wish that his speeches were shorter, but he does make good sense on some topics. I regret the fact that not one Opposition Member is sitting behind the Opposition Front-Bench spokesmen today, but I suppose that that signals a great deal about the balance of their interest in higher education and further education.
	This is a serious issue. As the Chairman of the Select Committee on Education and Skills, may I say that the Minister knows that we will be looking with great interest at his national skills strategy when it is published in June, not only because that is our job as a scrutiny Committee but because a hell of a lot of money—billions of pounds—is poured into skills, and many of us believe that the Treasury money that we put into that sector probably provides less added value than the money that we put into many other education sectors.
	We have every expectation that the improvements at pre-school and primary school level and in literacy and numeracy and much else will help as they move through the system, but there are not only skeletons but many hulks in the history of skills education—organisations that we came to know, and some of us quite liked them. We remember the Manpower Services Commission, the training and enterprise councils, the industrial training organisations and the national training organisations, which are almost gone, but not quite. We are now trying to learn to work with, and even love, the new bodies that are coming along.
	The fact is that we have two challenges in this country, with the dreadful under-performance of a significant tail of our population. Those people are under-skilled and challenged in what they can achieve in their personal lives, as well as in their productive, working lives—the two must go together. As someone who used to teach not only in a university but in extramural education, I know how wonderful it is when someone comes to education later and gains skills and education. Not only their ability to earn money changes, but they themselves change, as hon. Members on both sides of the House will agree.
	There is also shocking under-performance in this country's productivity. Many of us believe that we must attend to the skills, innovation and productivity circle in terms of what we do with the under-skilled people in our country. We will be considering the history and the cost in that regard, and I warn the Minister again that we need not just a new structure but the energy to make it work.
	At some stage, many people, as in much of the educational world, will want a period of stability in which things settle and they get used to the institutions in which they are supposed to work. Let us determine the skills strategy and let the institutions know that they have a reasonable future and reasonable longevity.
	This is the most difficult area. It will not be easy, and there will not be quick fixes. I emphasise this to the Minister: many people teaching in our colleges are on short-term contracts and have less training and less background in their subject, they are on lower pay, school teachers are earning much more than them, and many opportunities exist to go out and earn a much better living as a plumber, an electrician or an IT expert.
	Lastly, the quality of the courses offered is vital. There is nothing worse than getting young people to stay on at school, or getting people to come back to college, and then giving them poor, under-resourced and poorly taught courses. There must be quality—"It's quality, stupid"—whether in higher education, primary education or the further education sector.

Clive Efford: I shall be brief to allow other Members to speak. Talking at speed is something that I learned in my former life.
	I welcome the opportunity to contribute to this debate. One of the things that I want to stress is the need to be flexible to meet varying needs and demands. I want to draw attention to some examples of excellent work going on in and around my constituency.
	Last year, I gave out awards at the end-of-year ceremony at the Greenacres primary school in my constituency. I gave awards not just to the children but to their parents, who had been attending a family learning centre in the school. That centre was set up on the initiative of the school. The biggest resource that had been put into it was the school's time and effort in getting it set up—it had to beg, borrow and steal to finance it. It works in co-operation with local further education colleges, mainly Greenwich community college, and provides basic numeracy and literacy skills and teaching for parents in how to help their children in GCSEs and other aspects of their education.
	I have spoken to some of the parents who attended that centre, and they talked about wanting to fill the gaps in their education. They also talked about wanting to learn skills so that when their children go on to secondary school they have improved their employability. The school recognises the role that it can play in the local community by improving the education of adults in the local estate, and we need flexibility in the funding stream so that we can support that work and allow more schools to move into it. Alderwood school is now trying to follow suit and do exactly the same thing. It has already put its own money into setting up computer suites so that parents can come in and do the same work. Neighbourhood renewal money is provided for both schools, and both are working closely with the community college, as I said.
	The other scheme to which I want to draw attention is the unique and innovative project set up by Greenwich community college, based at Charlton Athletic football club: the London leisure college. It is providing skills and training not just to local people but to the work force of Charlton Athletic, 400 of whose stewards are receiving health and safety training, first aid training and training in other basic skills. It has attracted the attention of Anschutz, which is one of the partners in the development of the peninsula and one of the primary leisure companies in the world, and will be running the millennium dome in the future. It wants to become a partner with the London leisure college to provide education, training and skills to its future staff—it plans to employ 500 at the centre.
	Greenwich community college secured beacon status for London leisure college, based at Charlton Athletic. It works in partnership with Greenwich Leisure Ltd. and has played a significant part in the massive and rapid expansion of the business's operation by being flexible and meeting the business's varying demands for staff training. The fact that the project is based at Charlton Athletic means that sport can be used to attract people into education. Such people, especially young people, were excluded from school in the past and did not have a positive educational experience, but the popularity of sport is now attracting them to undertake basic skills training.
	Flexibility is required to meet various needs. Further education colleges can adapt to meet the needs of businesses that want skills and education training and to support grass-roots initiatives such as those at primary schools.

Janet Dean: I shall try to be equally as brief as my hon. Friend the Member for Eltham (Clive Efford).
	Further education colleges can and should be at the heart of the Government's skills strategy. Burton college, in my constituency, provides an outstanding service for young people, adults and employers throughout east Staffordshire and neighbouring parts of Derbyshire. It has approximately 12,000 students, of whom 9,000 are on further education programmes, 940 are on adult and community education courses and 450 are in higher education. The college made a significant contribution to achieving Government targets because more than 3,000 students progressed to level 3, half of whom were young people. Basic skills programmes were completed by 820 adults.
	Burton college is especially proud of its long-standing and well-regarded services to employers. That has been nationally acknowledged and the college will form one of the case studies for best practice that Ecotec is developing. The college supported the Government's skills agenda and the local economy by delivering a wide range of programmes designed to meet the specific needs of more than 250 local employers. The business development team at Burton college is proactive in its work with local businesses and creates opportunities for training intervention in individual businesses and across sectors.
	The college has worked with large local companies to develop bespoke training for graduate recruits and to design an HND course to enable progression to middle management. It has also provided one-day courses, day-release provision and on-site training.
	Local colleges are sufficiently flexible to meet the specific needs of their local economy. Their involvement with local business can bring benefits such as the development of staff so that real examples of industry can be brought to the classroom. They offer learners up-to-date technical knowledge and examples from the workplace, as well as ensuring that training is relevant to employers' needs.
	Further education colleges such as Burton college are able to work with their local communities. I welcome the community-based learning projects that have taken the world of education and training to those who may not be initially willing to access courses on the college campus. Burton college also works well with East Staffordshire borough council's economic regeneration unit and is actively involved in partnerships such as the local neighbourhood management initiative. I am sure that the Minister agrees that Burton college makes an outstanding contribution to fulfilling the skills agenda and assisting its region's economic growth.
	My hon. Friend will know that colleges are expected to charge employers at least 25 per cent. of the cost of delivering any training funded by the Learning and Skills Council. Will he reassure me that there is no intention to undermine the work of colleges by sponsoring competing provision delivered by private providers through the LSC's national contracting service? Will he confirm that national contracting service funding includes the same requirements for employers' contributions and does not create unfair competition? Such unfair competition might cause colleges to lose their long-standing employer customers and thus destabilise the continued provision of training in the area. Will he confirm whether the LSC national contracting service has supported the training of employers in my constituency alongside existing providers and, if so, how that is likely to affect the college's capacity to expand such provision? 6.54 pm

Kelvin Hopkins: I want to send one clear message to my hon. Friend the Minister. I commend the Government for at last taking seriously our national weakness in education and training. I think that they have got the message that we have a problem, which they are addressing. It is instructive to examine how we used to deceive ourselves about how well we were doing. We have a talent for national self-deception in our ability to, for example, play football or run railways. We are not good at it, but we think we are. We thought that we were good at education, but we were not.
	When Professors Sig Prais and Claus Moser of the National Institute of Economic and Social Research conducted research in the 1980s, they gave 30 electrical apprentices from France and 30 from Britain a simple mathematics test. The French apprentices got all the sums right and the British apprentices got all the sums wrong. There was an enormous difference. A subsequent comparison of kitchen manufacturers was featured in a television documentary. Workers on the shop floor in Germany could calculate, measure and produce a bespoke kitchen from a plan in English. In Britain, the equivalent workers could assembly standardised units and no more. The comparisons were stark. We deceived ourselves then, but things are getting better and I like to think that we will not deceive ourselves in the future.
	One of the differences between Germany, France and Britain in those days was the rigour of the teaching. The classroom pedagogy was endless hours of rigorous mathematics. That is difficult and unpopular, but it is necessary. If one is to succeed in such things, one must do mathematics. I used to teach economics and statistics at A-level. One of the basic problems was that the youngsters I taught were not numerate. Many of them did not have good English either. Those problems are being addressed and that will come through in the future.
	We must have rigour in the classroom from pedagogic teaching and rigour in practical skills. I should like to say much more, but that will have to suffice.

Ivan Lewis: With the permission of the House, I shall do my best to respond to the contributions, but it is unlikely that I will get through them all. If that is the case, I shall write to those hon. Members whom I do not mention.
	The hon. Member for Daventry (Mr. Boswell) made the valid point that we must not simply have a collection of existing initiatives and that we need a step change in our approach to skills. He made the Conservative party's proposal on higher education a big part of his contribution. Its policy will deny universities the significant income that they need and cap the aspirations of many young people. When the announcement was made, we heard that the money would be used to invest in vocational education and training, the implication being that money for university graduates would come from a different pot because they are a different cohort of young people from those who take vocational courses. That is not the message that we should send.
	My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) made an extremely good point about the positive contribution of trade unions. They have been incredibly effective, especially in respect of the trade union learning fund and the individual learning account intermediary. This is a good opportunity to pay tribute to the work of John Monks at the TUC, who adopted a progressive and positive view of skills. He will soon move on to his new job and I have every confidence that Brendon Barber will adopt a similar approach.
	The hon. Member for Harrogate and Knaresborough (Mr. Willis) said far too many nice things about my political future. Many people do not know that my in-laws are voters in his constituency, which may influence what he says to me because his seat is so marginal. They have admitted to voting for him from time to time. He made valid points about the importance of the ILA successor scheme, and I agree with him. He said that funding and other organisational arrangements might have a negative effect on the 14 to 16 flexible work-related learning pilots. Those are being evaluated and evidence is emerging about a positive college-school relationship. We will present that evidence to the House.
	The hon. Gentleman set five tests for the skills strategy. I expect us to meet all of them with one exception—the provision of finite resources without regard for the financial consequences. No member of the Liberal Democrat Treasury team was in the Chamber to influence his comments. He wants us to fund everything for everyone without regard to the financial consequences. That is why he is such a good Liberal Democrat.
	My hon. Friend the Member for Huddersfield (Mr. Sheerman) will no doubt hold me to account for the skills strategy. He was cynical about our capacity to deliver it in June. We are going to deliver it in June. However, I am not cynical about his capacity to hold me and other Ministers to account on the skills agenda.
	My hon. Friend the Member for Eltham (Clive Efford) rightly cited examples of good practice in his constituency—Greenacres primary school, Alderwood school, and the work that Greenwich community college and Charlton Athletic are doing. Linking children's education to adult learning is a means of tackling intergenerational underperformance and deprivation. If my hon. Friend can raise aspirations in his communities and get adults learning alongside kids, that is in the best interest of our creating a lifelong learning culture and society and doing something about intergenerational—
	It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

STANDARDS AND PRIVILEGES

Ordered,
	That Mr Derek Foster be added to the Committee on Standards and Privileges.—[Jim Fitzpatrick.] PETITION

Pharmacies

Bill Wiggin: The Office of Fair Trading has recommended to the Government proposals that would allow the unrestricted opening of pharmacies able to dispense NHS prescriptions. If the proposals were accepted, many local pharmacies such as Scott's pharmacy of 35 High street, Bromyard, and the Westfield Walk pharmacy, may well be at risk. That could mean that instead of prescriptions being dispensed just a walk away, they would have to be dispensed at a supermarket pharmacy or at an out-of-town shopping centre. I am grateful to Mrs. Janice Lucas, who has collected more than 2,000 signatures, including those relating to the Leominster pharmacy.
	The petition declares:
	We, the undersigned, urge this House to reject proposals that would allow unrestricted opening of pharmacies able to dispense NHS prescriptions, and to preserve local pharmacies and safeguard their continued services to local communities.
	And your Petitioners remain, etc.
	To lie upon the Table.

GEORGE ATKINSON

Motion made, and Question proposed, That this House do now adjourn.—[Jim Fitzpatrick.]

Desmond Swayne: I have come to the House to speak on behalf of my constituent, Mr. George Atkinson, whose birthday, incidentally, it is tomorrow, and who will have spent six years, two months and 15 days in prison in Dubai. He is our longest-serving prisoner in the middle east region. I know that not from the answer that I received from the Minister on 5 March at column 1070W, because he chose to withhold the information on the grounds that it was privileged—on the grounds of privacy; I know it because I was told it by Fair Trials Abroad.
	I owe the House an explanation, because I have raised the matter before. I raised it in Adjournment debates in the House on 12 June 1998 and on 13 January 1999. In those debates I concentrated on my conviction that Mr. Atkinson's conviction was entirely unsound and unjust, and my concern about his arbitrary detention. But that is all water under the bridge. What I owe to the House now is an explanation of why I have been silent these four years. Having raised the matter twice, why have I been silent for so long?
	I have been silent because Ministers told me to shut up. I distinctly remember being given that message clearly by Ministers at meetings—"Be quiet, Mr. Swayne. Leave it all to us. Keep quiet about it, and we'll fix it." We were promised as a quid pro quo for not raising the matter, for not asking parliamentary questions, and for not raising it in the House and outside, that we would be provided with a package of support. People may raise their eyebrows, but I distinctly remember Baroness Symons promising that we would be provided with expertise from the Arabists to assist us in framing the right approaches to the right people. We got nothing. As a consequence of my silence, Mr. Atkinson's release date has come and gone, but I shall return to that shortly.
	As I have been silent for so long, I shall briefly update the House about two events that have taken place in the intervening period. First, those who study these matters may recall—and if they check the record they will find—that Mr. Atkinson was convicted largely on the evidence of one Steven Trutch. That evidence was supplied to the court in Dubai by affidavits, so Mr. Atkinson's lawyers were unable to cross-examine him. Since I raised the matter in the House, Steven Trutch has been convicted and imprisoned in this country for swearing false affidavits. I think that that thoroughly undermines Mr. Atkinson's conviction.
	Equally—it was shameful that I was silent about this, but I stuck with the advice that I was given by the Minister—I was silent when, last year, Mr. Atkinson was taken from his cell and savagely beaten. I asked the Minister about the matter only recently, and he replied on 3 April:
	"During the visit, Mr. Atkinson told our consular staff that some prisoners, including himself, had been beaten during the disturbances at the prison on 30 July 2002, when, we understand, police were called to quell fighting among local prisoners." —[Official Report, 3 April 2003; Vol. 402, c. 828W.]
	That might be strictly true, but it creates an impression that is entirely false. Mr. Atkinson was not the victim of getting caught in the crossfire of a riot in a Dubai jail. He was deliberately taken from his cell and beaten by police officers with rubber truncheons. I wonder why. That event took place not long after the United Nations working group on arbitrary detention reminded the Government of Dubai of its opinion 17/1998, which said that Mr. Atkinson had been arbitrarily detained. I wonder whether those two events are connected.
	As a consequence of the opinion that Mr. Atkinson had been arbitrarily detained—this is the only time when the Foreign Office acted with any spunk, if that is a permissible term, during the entire process—the Government presented to the Government of Dubai a note verbale. I recently made an inquiry of the Minister about the note verbale and I received an answer on 12 May. I had asked him what happened and
	"what measures he took to follow up the note verbale."
	He replied:
	"On 4 April 1999 the Government of Dubai replied to the Note stating that they had been in contact with the UN Working Group on Arbitrary Detention . . . and had received confirmation that UNWGAD had accepted the Dubai Government's clarifications."—[Official Report, 12 May 2003; Vol. 405, c. 84W.]
	Apparently, everything is all right, as the working group and the Government of Dubai have agreed. Mr. Atkinson is in prison and it is okay. What a false impression to give. The working group has written to me and told me that its original opinion stands. It has confirmed that opinion in its subsequent opinion 16/2002.
	In trying to pursue the matter, I asked another question of the Minister. Again, he replied on 12 May:
	"We have advised Mr. Atkinson that questions about the application and interpretation of Dubai law should be pursued through his legal representatives." —[Official Report, 12 May 2003; Vol. 405, c. 84W.]
	We have pursued the interpretation through legal representatives. Indeed, I now have an opinion from Professor W. M. Ballantyne, QC, the primary jurist with expertise in jurisdictions under Arabic laws. His opinion is that Mr. Atkinson's sentence was completed on 31 August 2001, after his having served four and half years of a six-year sentence and obtaining one quarter of it in remission for good behaviour. That is the learned gentleman's opinion.
	The question arises about whether that remission for good behaviour is discretionary or mandatory. Professor Ballantyne says that article 44 of the relevant law is absolutely clear. Only two conditions have to be met—public safety and good behaviour, for which the Arabic term is "mugim", which literally means "going straight". It is mandatory for all prisoners to have that relief if those two conditions are met.
	The Attorney-General in Dubai argues that an extra six months must be served owing to the non-payment of a fine. Professor Ballantyne has considered that issue, too. Article 302 of the relevant law provides for the maximum of an additional six months, but it is not automatic—it must be the result of a formal process that is properly initiated and notified. The professor concludes that as there was no such notice or formal process in the case of Mr. Atkinson, he should have been released on 31 August 2001. Those are the facts. Let us imagine that there was a formal notice procedure whereby Mr. Atkinson was advised, "You haven't paid your fine, so you're going to serve an extra six months." That would take us to 28 February 2002—but Mr. Atkinson is still in prison. The Attorney-General said that Mr. Atkinson should not only get an extra six months for the non-payment of his fine, but lose his remission for good behaviour. We know that that cannot be true, because it would be double jeopardy. Professor Ballantyne is absolutely clear. He says:
	"In my view such a construction is entirely untenable."
	The fact is that the Dubai authorities were working to the assumption, however mistaken, that Mr. Atkinson would receive an additional six months for the non-payment of his fine. That might be wrong, but it was nevertheless their assumption. Towards the end of February 2002, the prison authorities told him that he had to cough up another smaller fine of £16,000, and that if he paid it he would be released. He therefore paid it. The prison authorities wrote to the Attorney-General in Dubai asking for the return of Mr. Atkinson's passport so that they could release him and deport him. So why is he still in prison?
	Ministers have told me throughout this business that they cannot interfere and have referred me to the interpretation of the law by our legal representatives. The difficulty in dealing with the authorities in Dubai is that they will not respond. On 10 July last year, the Attorney-General wrote to Mr. Atkinson's legal advisers in these ringing terms: "This correspondence is at a close: we are not interested any more." For 10 months, we have had no communications because they simply do not reply; they do not deal; they are not prepared to talk. It is no good the Foreign Office saying, "You've got to talk to legal representatives and sort it out with them", if the other side will not respond.
	Ministers cling to the idea that we cannot interfere, must not get involved, and can do only what is proper in consular terms. That is a load of nonsense, because we do it all the time. I recall that when there was an outrage in Yemen in which a number of British subjects were rounded up, the next day the Secretary of State came to the House and told us that he had been on the phone to his counterpart in Yemen. We continually make representations on behalf of people in prison in Morocco, Yemen and Saudi Arabia. Gary Onions came back on 9 May as a result of such action. Why has Mr. Atkinson been left behind? Why should not he have a fair deal? He was a businessman who paid his taxes: why is he not getting the benefit of the protection of the British authorities?
	Dubai—and the United Arab Emirates, of which it forms part—is a friendly nation. We do an enormous amount of trade with Dubai. There are not only formal trading links but a huge amount of social intercourse between our nations. A formal and an informal network could be exploited. Why has that not happened?
	During the six years in which Mr. Atkinson has languished in a foreign jail, how many ministerial visits have been made to Dubai? How many times did Ministers raise Mr. Atkinson's case with their counterparts, as I urged them to do through faxes to their offices whenever I discovered that they were going to Dubai?
	The position cannot be allowed to continue. A British subject cannot simply be abandoned in that way. It is monstrous and an outrage.

Mike O'Brien: I am grateful to the hon. Member for New Forest, West (Mr. Swayne) for raising the case of George Atkinson, a British citizen who is imprisoned in Dubai in the United Arab Emirates for financial crimes. I note that the hon. Gentleman has raised the case on at least two previous occasions, in June 1998 and January 1999. I appreciate his continued interest. We, too, are interested in it. I am sure that Mr. Atkinson, his wife, family and friends are also grateful for the hon. Gentleman's commitment.
	The Foreign and Commonwealth Office, through its consular staff in Dubai and London, is similarly committed to providing all the appropriate consular assistance to Mr. Atkinson. He is allowed to call our embassy almost daily and, as his family knows, our staff visit regularly to ensure his welfare and discuss aspects of his case. Our consular officers visited Mr. Atkinson most recently on 7 April. They confirmed that he is in good health. Another visit is planned for the end of this month.
	Mr. Atkinson completed a six-year sentence in Dubai for financial crimes on 28 February 2003. However, in accordance with Dubai law, he is now serving an additional six months for non-payment of fines.

Desmond Swayne: Will the Minister give way?

Mike O'Brien: On this one occasion.

Desmond Swayne: That is very generous. Given that I secured the debate, I wonder that the Minister is prepared to give way only once. Does he claim that his interpretation is correct and that Professor Ballantyne is mistaken?

Mike O'Brien: I shall come to Professor Ballantyne shortly. I said that I would give way only once because the hon. Gentleman knows that the time is normally divided, and I have much to say. He has made allegations, some of which I find dubious to say the least—

Desmond Swayne: Is the Minister questioning my honour?

Madam Deputy Speaker: Order. I ask the Minister to continue.

Mike O'Brien: Thank you, Madam Deputy Speaker. I am not questioning the hon. Gentleman's honour but his hyperbole and theatrics.
	The Dubai authorities have informed Mr. Atkinson's lawyers and the United Nations working group on arbitrary detention, to which I shall refer later, that he can expect to be released on 1 September 2003.
	As well as receiving a custodial sentence, Mr. Atkinson was ordered to pay a fine of 7,720,322 dirham, which is approximately £1.5 million, and a compensation amount of 99,822 dirham, which is approximately £19,964. After contacts in 2001 between the director of the ruler's court and a British lawyer acting on his behalf, Mr. Atkinson signed a letter to the ruler acknowledging his guilt, apologising for it, and commenting on his financial situation.
	However, the letter did not appear to give a full and detailed schedule of assets to show why Mr. Atkinson could not pay the fines. That omission appears to be crucial in the eyes of the Dubai authorities.
	Early in 2002, Mr Atkinson paid the £19,964 compensation. In the light of that, his solicitors, family and friends believe that he should have been released after having served three quarters of his sentence, as can be the case under UAE law. Mr. Atkinson shares that belief. However, I am told that, under UAE law, the decision to release a prisoner early is at the discretion of Dubai's Attorney-General and not automatic. The Attorney-General appears to have refused to exercise his discretion in this case.
	In 2001, the Dubai ruler's court told Mr. Atkinson's solicitors their legal position. It explained that, by refusing to pay the fine in full or demonstrating why he was unable to do so, Mr. Atkinson should expect to serve his full sentence plus another six months. In July 2001, the Dubai Attorney-General visited Mr. Atkinson in prison, a month before he expected to become eligible for parole, to reiterate the Dubai authorities' known position. The ruler's court repeated this advice in a letter to Mr. Atkinson's UK solicitors in May 2002, and also in its recent letter to the UN working group on arbitrary detention on 9 November 2002, a copy of which was also sent to Mr. Atkinson's lawyers. I am told that FCO officials understand that Mr. Atkinson's lawyers have not acted on the advice of the ruler's court, and have not instructed local UAE lawyers to take this matter forward. If that situation has changed, I would be interested to know about it.
	On 31 May 2002, our consul general wrote to Mr. Atkinson's lawyers, advising them of the need to take advice from a Dubai-based lawyer, and offering to provide a list of local lawyers. I am told that, to date, this offer has not been taken up. On 7 April this year, Mr. Atkinson's new UK solicitors wrote to the director of the Dubai ruler's court. They explained to the ruler's court why they thought that Mr. Atkinson should have been released early, after serving three quarters of his sentence. They also enclosed an opinion by a legal expert, Professor Ballantyne, expanding on this belief and citing relevant UAE laws. The Dubai ruler's court replied on 11 May, explaining that it maintained its position that
	"by refusing to pay the fine or demonstrating why he is unable to do so, Mr. Atkinson must serve his full sentence plus another six months."
	Our advice remains that the questions asked by Mr. Atkinson have to be addressed within the UAE legal system—not the ruler's court—by an appointed UAE lawyer.
	As I have said, we continue to provide all appropriate consular assistance to Mr. Atkinson. However, I would like to remind the hon. Gentleman of what he was told my one of my predecessors in the Adjournment debate on 13 January 1999. He was told:
	"it is not the role and responsibility of the Foreign Office to act as lawyers in court."—[Official Report, 13 January 1999; Vol. 323, c. 285.]
	Nevertheless, in line with our consular responsibilities, our consul general in Dubai raised Mr. Atkinson's case when he called on the Dubai ruler's court on 19 January. The ruler's court reiterated Dubai's previously stated position that Mr. Atkinson could expect to be released at midday on 1 September 2003.
	On 1 March 2003, our vice-consul met the head of the prison's public relations department to discuss the case. The official confirmed that Mr. Atkinson would have to serve an additional six months from his release date, as he had not paid the court fines in full. He told us that the jail administration had written to the Dubai public prosecutor in mid-December 2002 to advise them of the completion of sentence. The prison authorities, however, had not received any instructions from them to release Mr. Atkinson on 28 February. Our Embassy followed up this information with the public prosecutor's office and received confirmation of the procedure.
	The hon. Gentleman has tabled 12 parliamentary questions concerning Mr. Atkinson's case over recent weeks. The hon. Gentleman is not known for his silence. Indeed, he has demonstrated his capacity for holding court and commanding the House with his oratory today. I will talk to my right hon. Friend about the hon. Gentleman's comments that he was asked to be silent. As far as officials are concerned, they tell me that they are not aware that this was said, but the hon. Gentleman is an honourable Gentleman, and if he says that that was said, obviously I shall take that at face value and inquire with my colleagues. So far as I am concerned, I have certainly made no such suggestion to him, and would not seek to do so.
	A number of questions have been asked very publicly in recent months, and a number of those in turn raised questions about the stance of the United Nations working group on arbitrary detention in the case of Mr. Atkinson. As the hon. Gentleman said, the group investigates cases of individuals who have allegedly been detained either arbitrarily or in a manner inconsistent with the provisions of the universal declaration of human rights or those of UN human rights treaties. It does that by seeking information confidentially about details of the detentions from Governments, non-governmental organisations or other concerned individuals. It then gives a public but non-binding opinion on each case, issuing recommendations for corrective action to the relevant Governments.
	The working group has been involved twice in Mr. Atkinson's case. Its opinion 17/1998 of 17 September 1998 concluded that he was being detained arbitrarily, and that the Dubai Government should take the necessary steps to remedy the situation. Our embassy in Dubai sent a note verbale to the Dubai Government in November 1998, asking them to implement the working group's opinion. The Dubai Government replied that they had established contact with the group to address the open issues involved in opinion 17/1998. The Dubai authorities last corresponded on 9 November 2002 with Mr. Louis Joinet, then chairman of the UN working group. We have been made aware that there have been more contacts recently.
	In paragraph 18 of its second opinion, 16/2002 of 29 November 2002, the working group concluded:
	"With regard to the present period of detention, dating from 14 December 1999, the Working Group considers that it does not have sufficient information to give an opinion on whether or not the continued detention is of an arbitrary nature, which would involve interpreting a domestic regulation on the granting of early release".
	The hon. Gentleman interpreted Foreign Office comments on that as somehow suggesting that we think it all right for Mr. Atkinson to be detained. That is complete nonsense, as the hon. Gentleman knows. We continue to provide consular assistance, although, as I have said, we cannot act as the lawyer of someone who has been detained. That is not a role that the Foreign Office adopts.
	The working group went on to say:
	"Since 14 December 1999 (Day of sentencing) not enough elements were found to state the arbitrary character or not of the detention."
	That is the view that we currently have from the group. As the hon. Gentleman knows, we have repeatedly advised Mr. Atkinson that a local lawyer would be best placed to address the issues that the group raised, within the Dubai legal system.
	As the hon. Gentleman knows, a letter-writing campaign on Mr. Atkinson's behalf is under way. Since mid-April, 65 supporters have submitted a template letter to the Foreign Secretary expressing their
	"deep dissatisfaction with the way in which the case of George Atkinson has been handled and continues to be handled by your office".
	The letter raises two points. It cites the opinion of Professor Ballantyne that Mr. Atkinson should have benefited from an early release according to Dubai law, and it points out that the UN working group's opinion of 29 November 2002 endorsed its opinion 17/1998.
	I have to say that that interpretation of the working group's recent opinion is, to say the least, not complete. Indeed, it is somewhat unfortunate. Although the working group upholds its previous opinion that Mr. Atkinson was arbitrarily detained until his sentencing on 13 December 1999, the thrust of the latest opinion is that the group cannot confirm whether he has been arbitrarily detained since 14 December 1999. The group states that it does not have enough information to give an opinion on that aspect.
	As the hon. Gentleman knows, our opinion is very clear. We think that the matter must be taken up in the UAE legal system, and we are prepared to provide a list of lawyers capable of dealing with it. No doubt Professor Ballantyne is a wonderful lawyer. I am a lawyer myself, and I must say that whenever I had to deal with a case in another country I got hold of a lawyer who knew and was involved in the law in that country, who would be able to operate in the system there, who knew the individuals concerned, and who would ensure that I was properly briefing someone who knew exactly what he was doing. I do not wish to undermine the professor's academic qualifications—I am sure that they are excellent—but local knowledge does help. That is why we have consistently said that that is the way in which to approach this issue.
	The hon. Gentleman knows our position. We have often stated that the application of Dubai law is a matter for the Dubai legal system. An external approach could not translate into local legal results. The idea that we can wave a political wand is pure nonsense, and to hold out that hope to the family is unfortunate. The Foreign Office is not prepared to engage in a political game. We must deal with reality and treat the law seriously. Mr. Atkinson's detention is a serious matter, and that is how we have treated it and how we will continue to treat it. I very much hope that the family can seek Mr. Atkinson's release using the proper legal procedures in Dubai.
	Question put and agreed to.
	Adjourned accordingly at half-past Seven o'clock.